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Investor focus has been firmly on the new round of reciprocal levies that the White House is due to announce on Wednesday, with details scarce. Trump said late on Sunday that essentially all countries will be slapped with duties this week.
That has left currency markets subdued as traders stayed on the sidelines awaiting clarity on Trump's trade policies. Trump has already imposed tariffs on aluminium, steel and autos, along with increased tariffs on all goods from China.
"The second quarter may bring with it as much uncertainty and volatility for investors as the first quarter of the year," said Anthony Saglimbene, chief market strategist at Ameriprise Financial.
"To date, there has been very little clarity on what and who these tariffs will target out of the gate. Market volatility could escalate depending on what and who is targeted."
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The euro was steady at $1.082325 after gaining 4.5% in the first quarter of the year, its strongest quarterly performance since October-December in 2022, thanks mainly to Germany's fiscal overhaul, although some investors are sceptical of the bull run lasting longer.
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The Japanese yen was slightly stronger at 149.66 per dollar on Tuesday. The yen rose nearly 5% against the dollar in the January-March period on growing bets that the Bank of Japan would hike interest rates again.
Data on Tuesday showed business sentiment among big Japanese manufacturers worsened in the three months to March, a sign escalating trade tensions were already taking a toll on the export-reliant economy and complicating the BOJ's next move.
The spotlight during the Asian hours will be on the Reserve Bank of Australia. The central bank is expected to keep its cash rate unchanged but as always the tone of the officials will be in focus, according to a Reuters poll.
The RBA delivered its first rate cut in over four years in February but has since adopted a cautious tone on further easing, with Governor Michele Bullock and other top policymakers downplaying the likelihood of multiple cuts.
"We expect the recent run of Australian economic data to encourage the RBA to deliver a more dovish message, particularly amid heightened geopolitical and policy uncertainty," said Carol Kong, a currency strategist at Commonwealth Bank of Australia.
"A more dovish tone will likely prompt the market to more fully price in a 25bp rate cut in May and pull Australian dollar down."
The Aussie eased 0.26% to $0.6233, hovering near a four-week low of $0.6219 it touched on Monday. The currency eked out a 1% gain in the first quarter as tariff worries crimp investor's risk appetite.
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The New Zealand dollar was 0.17% lower at $0.5669.
Beyond tariffs, it is gearing up for a busy week with a string of economic reports, including jobs and payrolls data, that could shed much-needed light on how the U.S. economy is holding up under a second Trump presidency.
Federal Reserve Chair Jerome Powell and other central bank officials' speeches this week also could offer clues on the path for U.S. interest rates.
The dollar index , which measures the U.S. currency against six rivals, was 0.09% lower at 104.09. Sterling was a tad firm at $1.29275.
