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The dollar barely recouped its heavy losses on Tuesday as investors were no clearer on whether a de-escalation of the Sino-US trade war was underway with Treasury Secretary Scott Bessent suggesting the onus was on China to start negotiations.

Bessent said in an interview on Monday that it was up to China to de-escalate on tariffs - the latest in a slew of conflicting signals over progress on trade talks between the world's two largest economies.

While Trump insists there has been progress and that he has spoken with Chinese President Xi Jinping, Beijing has denied such assertions.

The confusion just gave investors more reason to sell the dollar and it fell sharply against the safe-haven yen and Swiss franc in the previous session.

The US currency was last up 0.11% at 142.19 yen, barely reversing its 1.2% fall, and ticked 0.18% higher against the Swiss franc to 0.8217, having slid 0.8% on Monday.

Sentiment was helped slightly by news that US President Donald Trump's administration will move to reduce the impact of his automotive tariffs on Tuesday.

"Given the conflicting signals, I think a deal is very unlikely in the near-term and China might be preparing for a protracted trade war," said Carol Kong, a currency strategist at Commonwealth Bank of Australia (CBA).

"Overall, the US tariff policy is very chaotic and markets definitely don't like that, but there is indeed some growing optimism that the worst of the trade war is over."

Despite little evidence of progress being made in trade negotiations between the United States and China, both sides in recent days seemed to have softened their respective stances, with the Trump administration signalling openness to reducing tariffs and China exempting some US imports from its 125% levies.

The euro was down 0.15% at $1.1404, but remained on track for its largest monthly gain against the dollar in nearly 15 years as investors flee US assets and search for alternatives in Europe.

Sterling was pinned near a three-year top and last bought $1.3427. Against a basket of currencies, the dollar last steadied at 99.079, having fallen 0.6% in the previous session.

Investors were also bracing for a week packed with US economic data, which may provide some early indication on whether Trump's trade war is hitting home.

Friday's jobs report will be key for markets, with preliminary first-quarter growth figures and core PCE data - the Federal Reserve's favoured inflation gauge - due ahead of that.

"I think US economic data will definitely deteriorate further from here," said CBA's Kong.

"When the weak hard data comes out, I think it will further weigh on the US dollar, because for the time being, I think investors are seeing the US dollar as a less reliable safe-haven currency. In fact, I think (it's) trading more like a risk currency."

In Canada, the loonie was little changed at C$1.3837, ahead of the outcome of Monday's general election in which Trump's tariffs and musings about annexing Canada became the central issue.

The Australian dollar eased 0.02% to $0.6431, while the New Zealand dollar fell 0.27% to $0.59635.

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