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The U.S. dollar hovered near a one-week low versus major peers on Tuesday as traders considered whether President-elect Donald Trump's tariffs would be less aggressive than promised.

On Monday, the greenback slid against the likes of the euro and sterling following a report in the Washington Post that Trump's aides were exploring plans that would apply tariffs only on sectors seen as critical to U.S. national or economic security.

However, the currency made up some of the ground after Trump denied the report in a post on his Truth Social platform.

The U.S. dollar index, which gauges the currency against the euro, sterling and four other rivals, edged up to 108.38, after dropping as low as 107.74 overnight, its weakest since Dec. 30.

On Jan. 2, the index pushed as high as 109.58 for the first time since November 2022, in large part due to expectations that Trump's promised fiscal stimulus, reduced regulation and higher tariffs will boost U.S. growth.

"His (Trump's) 10-20% universal tariffs were always seen as unlikely to eventuate in such stringent form - so the reporting from the Washington Post has cemented this widely held view, even if Trump has played it down," said Chris Weston, head of research at Pepperstone.

"Clearly, the last thing Trump wants at this point is to lose his leverage and credibility going into negotiations ... even if the WaPo reporting becomes the reality over time."

The euro zone has been a particular target of Trump's tariff threats, and the euro was down slightly at $1.03795, after jumping to a one-week high of $1.0437 on Monday.

Sterling was also slightly weaker at $1.125085, following its climb as high as $1.2550 in the prior session.

The dollar gained 0.3% to reach 158.23 yen, the highest level since July 17, drawing support from higher U.S. Treasury yields.

Against the Canadian dollar, the U.S. currency rose slightly to C$1.4345, following its slide to C$1.42805 on Monday for the first time since Dec. 17 after Canadian Prime Minister Justin Trudeau said he would step down as leader of the ruling Liberals in the coming months.

"The price tells traders all they need to know: The markets believe the economy will be better off without Trudeau," said Kyle Rodda, senior financial market analyst at Capital.com.

In cryptocurrencies, bitcoin was about 0.9% stronger at $102,560, trading at its highest levels since Dec. 19.