The euro struggled on Tuesday despite European Central Bank president Mario Draghi's comments about "relatively vigorous" inflation in the previous session, while the dollar paused before the U.S. Federal Reserve's policy meeting.
The euro hit a 3-1/2 month high on Monday after Draghi expressed confidence in euro zone inflation and wage growth, but the gains were temporary.
After initially rebounding on Tuesday, the single currency then turned lower - down 0.1 percent on the day at $1.1742 after the ECB's chief economist Peter Praet said there was nothing new in Draghi's comments.
Analysts, however, had largely interpreted Draghi's speech as hawkish - euro zone money markets brought forward their expectations for a 10 basis point ECB rate hike to September from October 2019 - helping to underpin the single currency.
Broader currency markets were largely quiet as the latest round of tariffs in the U.S.-China trade conflict kept investors on edge, and with an expected Federal Reserve rate rise - the third in 2018 - mostly priced in by traders.
"There is a general lack of impulses. The market is not reacting (to the trade war) because we are not seeing any economic impact. The other big driver (of currencies) is usually monetary policy but the FOMC is going to be a non-event," Thu Lan Nguyen, a strategist at Commerzbank in Frankfurt, said, referring to the Federal Open Market Committee's two-day meeting that begins on Tuesday.
"The dollar remains the absolute go-to currency when there is any question about risk or stability or any of these geopolitical situations," said Bart Wakabayashi, Tokyo branch manager at State Street Bank.
"If we have negative news out of the Brexit talks, that's going to be a huge push for the dollar...If we get some sort of more-than-expected hawkish sentiment out of (the Fed), that should be another push for the dollar," Wakabayashi said.
The minutes showed a few of the Bank of Japan's board members said the central bank must consider more seriously the potential dangers of ultra-easy policy, such as the negative impact on the country's banking system.
The Swiss franc, a currency often sought out when investors feel nervous, fell 0.2 percent to 1.1356 francs against the euro.