The dollar held steady on Tuesday before the start of the U.S. Federal Reserve's policy-setting meeting, while the Australian dollar fell after its central bank raised rates but took a cautious stance going forward.
Falls in European share prices also supported the dollar, which has a tendency to gain when investors shed risk assets. Movements in the foreign exchange market were further dulled because Tokyo markets were closed for a national holiday.
The dollar fell as stocks gained the previous day after data showed a pick-up in manufacturing activity round the globe, but later lost some ground on concerns about the banking system.
Sterling tumbled against the dollar on Tuesday when details were published of a shake-up of some government-acquired banks.
Shares in Royal Bank of Scotland (RBS.L) fell some 5 percent in early trade after it agreed to sell off some businesses. [ID:nL3540088]
In contrast, Lloyds Banking Group (LLOY.L) stocks rose some 2 percent after it said it would launch a record 13.5 billion pound ($22 billion) rights issue.