The dollar index, which measures the greenback against a basket of six major currencies hit its highest in four weeks .
The dollar was flat at 111.73 yen JPY=, having earlier dipped against the Japanese currency as worries over North Korea flared up again amid an escalating war of words between it and the United States.
The yen made sharp gains versus the greenback on Monday after the North Korean foreign minister said President Donald Trump had declared war on the country and that Pyongyang reserved the right to take countermeasures, including shooting down U.S. bombers even if not in its air space.
“The dollar tends to fall on flare-ups in North Korean-related matters, but whether the Federal Reserve can hike interest rates in December as they projected still remains the ultimate decider (of dollar direction),” said Shin Kadota, senior strategist at Barclays in Tokyo.
Immediate focus was on what views might be expressed by Fed Chair Janet Yellen, who is due to speak in Cleveland at 1645 GMT on “inflation, uncertainty, and monetary policy.”
New Zealand’s dollar extended the previous day’s slide and was down 0.6 percent at $0.7223 NZD=D4, having sunk after New Zealand’s National Party won the largest number of votes in Saturday’s election but not enough seats to govern outright.
