The US dollar rose 0.2% to 97.010 in early trading Tuesday as investors returned from holiday break and eyed key economic data releases. The Dollar Index gained momentum against a basket of six currencies, with markets focusing on Federal Reserve minutes due Wednesday and upcoming inflation data that could shape interest rate expectations.

Sterling fell 0.3% to 1.3594 after the UK reported unemployment climbed to 5.2% in December, the highest level since early 2021. Wage growth excluding bonuses also slowed sharply to 4.2% from 4.5%, raising expectations for a Bank of England rate cut next month as the labor market shows increasing weakness.

The Japanese yen recovered slightly to 152.94 after weaker-than-expected GDP data raised concerns about Japanese growth. Meanwhile, the Australian dollar eased to 0.7068 after Reserve Bank minutes showed policymakers remain cautious on inflation but uncommitted to further rate hikes. Currency markets remain sensitive to economic signals amid global uncertainty.