The dollar index weakened on Tuesday, reverting to its recent down trend and hitting its lowest in a year as markets remained in thrall to dovish comments delivered last week by Fed Chair Jerome Powell.

The next potential catalysts to slow or accelerate the dollar's decline are likely to be this Friday's PCE inflation data -- the Fed's favored gauge of price growth -- or next week's non-farm payrolls report, with the jobs release potentially holding more sway after Powell focused heavily on the labor market.

Separate sets of data released on Tuesday indicated softening in U.S. house prices, though with slight upward revisions to previous data, while consumer confidence came in stronger than expected.

U.S.
Treasury yields were mixed, falling 1-3bp in the front end through the belly and rising 1-2bp for longer maturities.

The 2s-10s curve steepened 4bp to a still inverted -7.6bp.

The S&P 500 had risen 0.2% by the New York afternoon, though trading was cautious ahead of the upcoming quarterly report from AI chip firm Nvidia that is due on Wednesday.

WTI eased 2.49%, giving back some recent gains after prices surged more than 7% during the prior three days.

Copper gained 0.54%, hitting its highest in nearly six weeks during the session and helped by expectations that the Fed would cut rates soon, a weaker dollar and signs of improving demand in top consumer China.

Gold firmed 0.25%, overcoming earlier losses.

Heading toward the close: EUR/USD +0.23%, USD/JPY -0.34%, GBP/USD +0.55%, AUD/USD +0.33%, EUR/JPY -0.09%, GBP/JPY +0.01%, AUD/JPY -0.09%.

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