The dollar dropped, The Euro steadied

The dollar dropped 0.1 percent against the yen to 111.61, well shy of last week’s two-month high of 112.725.

The yen tends to benefit during times of risk aversion due to Japan’s net creditor status and the expectation that Japanese investors would repatriate assets when facing a crisis. 

The euro steadied after tumbling on Monday following a severely diminished election victory for German Chancellor Angela Merkel that was accompanied by a surge in support for the far right. 

Support for Merkel’s conservatives unexpectedly slumped to its lowest since 1949 and the Social Democrats, partners in the outgoing coalition, said they would go into opposition. 

The single currency was flat on the day at $1.1848, while the dollar index, which tracks the greenback against a basket of six major rivals, was down slightly at 92.634. 

On Monday, New York Fed President William Dudley said the U.S. central bank is on track to gradually raise rates given factors depressing inflation are “fading” and the U.S. economy’s fundamentals are sound. 

But Chicago Fed President Charles Evans said the Fed should wait until there are clear signs of faster wage and price growth before hiking rates again. 

Crude oil prices took a breather after soaring more than 3 percent on Monday, as major producers said the global market was on its way to rebalancing while Turkey threatened to cut oil flows from Iraq’s Kurdistan region to its ports. 

U.S. crude dipped 0.2 percent to $52.14 a barrel, after touching its highest levels since April. Brent crude rose slightly to $59.04, after scaling its highest peak since July 2015. 

Gold was slightly higher after the heightened Korean tensions helped push it up more than 1 percent overnight. Spot gold added 0.1 percent to $1,311.10 per ounce.