The Trump government is expected later this week to publish a list of Chinese products that could be subject to new US tariffs.
The dollar slipped lower against a basket of the other major currencies on Tuesday as rising global trade tensions continued to weigh on market sentiment.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.18% to 89.53 by 07:20 GMT.
Investors remained on edge after China imposed extra tariffs on certain U.S. imports, escalating a trade dispute between the world’s two largest economies and stoking concerns about the impact on global growth.
The Trump administration is expected later this week to publish a list of Chinese goods that could be subjected to new U.S. tariffs.
The dollar was fractionally higher against the yen, with USDJPY last at 106.07.
The dollar struggled to gain ground against the yen after three days of declines amid a selloff in tech shares that sent Wall Street tumbling and resurgent worries over a trade war.
The Japanese yen, typically viewed as a safe-haven currency, tends to be sought out by investors during times of political or economic uncertainty.
The euro moved higher against the dollar, with EURUSD rising to 1.2325.
The pound was also higher against the dollar, with GBPUSD advancing 0.23% to 1.4076.
Meanwhile, the Australian dollar was higher, with AUDUSD climbing to 0.7695.
The Aussie showed little reaction after the Reserve Bank of Australia held interest rates at a record low 1.5% on Tuesday, in what was a widely anticipated decision.