European shares traded higher on Tuesday, bouncing further away from earlier lows hit this month despite political uncertainty in Germany. Wall Street shares rose to record highs while Nikkei closed 0.49 percent higher.

Dollar fell against its major rivals on Tuesday, weighed by sluggish Treasury yields. Dollar index was down 0.2 percent. EUR/USD was up to 1.1773 overnight as risk appetite and softer yields pushed the pair higher.

Emerging market currencies recovered, with the Russian ruble and South African rand climbing 0.38 and 0.56 percent respectively. USD/TRY extended its gains, up 0.70 percent to fresh all-time highs of 3.9818 overnight.

Gold extended its gains, up 0.35 percent early in European trade. XAU/USD hit 1286.28, with silver also up almost 0.40 percent.