The dollar fell in Asian trading on Tuesday, as concerns over tensions with North Korea and Syria weighed on U.S. Treasury yields and offset expectations of U.S. interest rate hikes.The dollar index, which gauges the U.S. currency against a basket of six major peers, edged down 0.1 percent to 101.950.The dollar dropped 0.2 percent to 110.68 Japanese yen, moving away from its overnight high of 111.57.
"As a Le Pen presidency is perceived to increase the likelihood of France's withdrawal from the European Union, the uncertainty is likely to continue about what this could mean for the euro, along with a potential wider hit to global markets".
Meanwhile, Secretary of State Rex W. Tillerson said on Tuesday that President Bashar al-Assad's reign in Syria was "coming to an end" and warned that Russian Federation was at risk of becoming irrelevant in the Middle East by continuing to support him.
The exception was oil, which continued its steady climb on supply concerns in the wake of the US missile strikes on a Syrian air base last week, and a shutdown at a Libyan oilfield. Russian President Vladimir Putin has stood by Moscow's ally Assad, who denies blame.
Geopolitical tensions in Asia were also in focus, after the US decision to move a Navy strike group toward the Korean peninsula following provocative behavior from North Korea.
"Any escalation in geopolitical concerns could push us back lower in yields", said Justin Lederer, Treasury strategist at Cantor Fitzgerald in NY.
U.S. Treasury yields were down for a second day as global tensions boosted demand for low-risk assets. The benchmark 10-year yield, which wallowed at its lowest levels since November on Friday, last stood at 2.384 percent US10YT=RR in Asian trading, up from its USA close of 2.373 percent.
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The slump in the dollar reflected some analysts' commentary on the short-term trend for the greenback, after Morgan Stanley noted in a research report to clients that "USD positioning is short but warned that "sentiment has improved in recent trading sessions".
Emerging market stocks were down 0.4 percent, on track for their fourth straight day of declines.
The dollar slid 1.1% against the Japanese yen to ¥109.7, its lowest level since mid-November.
In France, polls for many weeks have been showing centrist Emmanuel Macron and far-right leader Marine Le Pen on track to top the first round of voting on April 23 and go through to a May 7 runoff.
The pan-European STOXX 600 share index fell 0.4 percent.
Gold, viewed in times of global tension as a safe place to store wealth, last traded up 1 percent on the day at nearly $1,266.96 an ounce.