The dollar eased slightly away from a 16-month high versus its major rivals on Tuesday, as it surged the previous day on the back of save-haven flows sparked by political uncertainties in Europe and fears of a global economic slowdown.

Investor confidence is being eroded by bitter trade tensions between the United States and China, fears of a no-deal Brexit, and a standoff between Rome and the European Union over Italy's deficit-deepening budget.

To add insult to injury, corporate earnings growth are expected to have peaked amid rising borrowing costs.

Shares on Wall Street tumbled on Monday, with falls led by technology stocks.

The U.S. Federal Reserve is expected to lift rates by a further 25 basis points in December, with two more hikes to follow by mid-2019, as wage pressures build in a booming economy.

USD/JPY rose to 114.20 on Monday, a six-week high as EUR/USD stood at 1.1235 on Tuesday, just shy of its lows of 1.1216. Cable recovered slightly to 1.2896 from its lows of 1.2827.