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The U.S. dollar and the yen, both safe haven assets, were mostly steady after spiking higher overnight as renewed concerns over the U.S. banking sector and economy dented risk sentiment.

The dollar index, which measures the currency against six major rivals, nudged 0.01% higher to 101.80 following a 0.5% increase overnight. The index is down 0.76% for the month.

Shares of First Republic Bank slid nearly 50% on Tuesday after it reported a more than $100 billion plunge in deposits in the quarter, battered by lost confidence in the banking sector.

It faces dwindling and tough options to turn around its business with the creation of a 'bad bank' or asset sales possibilities, a source familiar with the matter told Reuters.

"The USD increase is the typical response to bad news, even if the bad news is based in the United States," said Joseph Capurso, head of international and sustainable economics at Commonwealth Bank of Australia. "While concerns about small U.S. banks remain, we expect the USD to stay elevated."

The Japanese yen inched up 0.01% to 133.69 per dollar, after gaining about 0.4% on Tuesday. The traditional safe-haven gained 2.6% in March amid fears of a widespread banking crisis but has lost 0.6% for the month of April.

Also weighing on sentiment was fresh economic data. U.S. consumer confidence dropped to a nine-month low in April, data overnight showed, heightening the risk that the economy could fall into recession this year.

The U.S. Richmond Fed manufacturing index slid as well, down at -10 in April, the fourth straight month of contraction.

Markets are now pricing in a 76% chance of a 25 basis point hike when the Federal Reserve meets next week, CME FedWatch tool showed, down from a 90% chance at the start of the week.

The Federal Reserve will publish its internal review of its supervision of Silicon Valley Bank on Friday, the central bank said.

The review, which is being led by Fed Vice Chairman for Supervision Michael Barr, follows the regional bank's abrupt failure last month. It will include policy recommendations and confidential supervisory information that the Fed typically does not disclose to the public, Barr has said.

The euro was up 0.04% at $1.0976, but has drifted away from the 10-month high it touched earlier this month. Sterling was last trading at $1.2411, up 0.02% on the day. The kiwi rose 0.15% to $0.615.

The Australian dollar was swinging between losses and gains after data showed inflation eased from 33-year highs in the first quarter, while core inflation dipped below forecasts.    ING economists said a cooler-than-estimated inflation report should be enough to "encourage thoughts that the recent pause in rate tightening by the Reserve Bank of Australia may end up being more than that, and confirm that 3.6% was the peak in rates this cycle."

In cryptocurrencies, bitcoin climbed 1.2% to $28,315.40. Ethereum rose 0.4% to $1,867.70.