The dollar rose against a basket of major currencies on Tuesday to consolidate above its three-year low last week, but fears that the US fiscal deficit may hinder the economy have cast a shadow over currency expectations.
The dollar index, which tracks the performance of the greenback against six major currencies, hit 89.347, up 1.2 percent from a three-year low of 88.251 on Friday.
The dollar has fallen in recent months as several factors pushing downward have eroded the positive momentum of US interest rates.
The US currency has also been undermined by growing fears of a US budget deficit, which is expected to swell to more than $ 1 trillion in 2019 as government spending increases and corporate tax cuts slash.
Against the yen, the dollar rose 0.2 percent to 106.77 yen after recovering from a 15-month low of 105.545 on Friday.
The euro fell 0.2 percent to $ 1.2387, down from a three-year high of $ 1.2556 on Friday.