The USD gained against the EUR for the second session in a row on Tuesday, after the release of unexpectedly weak U.S. confidence data intensified risk aversion with investors. Further concerns arose about the possibility the Federal Reserve will signal an eventual end to its stimulus policy stance at its FOMC meeting next week. The dollar index rose to 76.233, up from 76.100 late Monday, recovering from losses seen during Tuesday's earlier session.

The Conference Board's index of consumer confidence declined to 47.7 from a revised reading of 53.4 last month. This weakness mirrors the continuous rise in unemployment levels and undermines stabilization in other areas of the economy such as stabilization in financial markets and home prices.

Looking ahead for today, the release of the Core Durable Goods Orders at 12:30 GMT and New Home Sales at 14:00 GMT will likely cause volatility for the USD pairs. Further disappointing data may push the EUR/USD pair even lower.