The green back goes steady against yen and euro after recent selling.
But the U.S. currency remained vulnerable to any surprise from a two-day U.S. central bank meeting ending on Wednesday. The Federal Reserve is widely expected to hike interest rates for the first time in almost a decade.
The dollar was flat at 121.03 yen JPY=, having pulled back from a 6-week low of 120.35 on Monday.
A week ago the greenback was trading above 123 yen. Cautious traders have since trimmed their dollar positions, awaiting clues on how the Fed might set the pace for additional monetary tightening next year.
"Dollar long positions were being liquidated in the market at a faster pace than expected."
"It could face additional pressure if U.S. Treasuries are bought back on relief that the Fed's rate hike cycle will be quite a slow one."
The Fed has hinted that it intends to hike rates gradually, a stance deemed by many as relatively dovish.
"Even if the Fed sends a hawkish message by suggesting it aims to hike actively next year, they are data-dependent".
"Indicators will have to show the U.S. economy can withstand rate hikes before the dollar can launch into its next phase of appreciation."
The euro was little changed at $1.1010 EUR=, off a 6-week peak of $1.1048 overnight.
Elsewhere, the pound struggled on signs the British government may not get is way in talks with European partners before next year's vote on leaving the EU, which added to political anxiety