Dollar in range: The US dollar remained close to a 4-1/2-month peak against major currencies on Tuesday as traders scaled back expectations for the Federal Reserve's first interest rate cut of the year.

Renewed optimism in the US economy following unexpected growth in manufacturing data boosted the dollar to a six-week high against the euro and brought it within reach of similar gains against the pound.

Concerns over potential intervention by Japanese authorities tempered the dollar's advances against the yen, despite long-term US Treasury yields reaching a two-week high.

Gold, typically buoyed by falling yields, regained ground after retreating from a record high on Monday.

Market sentiment shifted as the US rate futures market now predicts a 61.3 per cent chance of a Fed rate cut in June, down from around 70.1 per cent probability a week earlier.

Analysts suggested that any dips in the dollar index should be viewed as buying opportunities, with targets around the 106 region. 

The dollar index, measuring the currency against a basket of peers, edged slightly higher to 105.05.

The euro and sterling both dipped against the dollar, while the yen saw a slight strengthening despite ongoing concerns about intervention from Japanese officials.

Elsewhere, China's yuan hit a 4-1/2-month low against the dollar amid a strong greenback and selling by state-owned banks.

Commodity-linked currencies like the Australian and New Zealand dollars experienced mixed trading, while spot gold saw a modest increase after pulling back from record highs.

In the cryptocurrency market, bitcoin declined following a sudden drop in price, coinciding with weaker trading in Chinese stocks at the start of the day.

Analysts observed China's market opening as an intraday driver of direction in recent trading sessions.

(With Reuters Inputs)