The Dollar rebounded on Tuesday, following Monday's decline after the Silicon Valley Bank (SVB) collapse, as investors awaited the release of US consumer inflation data.       

Reuters reports that the consumer price index figures out on Tuesday could increase volatility in global markets. This comes after concerns a possible banking crisis led traders to lower expectations for Fed rate hikes.

At the time of writing, the Euro was down 0.36% at $1.069 as the Dollar rallied after reaching a one-month high on Monday of $1.075 and rose 0.85% across the session.

In addition, USD rose 0.79% to 134.25 Yen, reversing some of the 1.4% losses on Monday.

"Essentially, it's a very, very nervous market," according to Alvin Tan, head of Asia FX strategy at RBC Capital Markets.

"We have seen some retracement of the Dollar's losses overnight, but it's quite partial.

"Ahead of us, of course, is the CPI reading today, which is quite important because it's basically the last data point before the (Fed decision) next week."

Emergency measures have been implemented by US authorities following the SVB collapse, pledging to protect depositors in an attempt to boost banking confidence.

The Dollar index – measuring the greenback against six rivals – increased 0.3% to 104 on Tuesday, partly reversing Monday's 0.94% decline.

Moreover, the Sterling fell 0.28% on Tuesday to $1.215 after edging up 1.22% on Monday. Data published on Tuesday revealed UK pay growth decelerated in the three months to January.

US CPI figures are forecast to reveal inflation cooled last month to 6% year-on-year from 6.4% in January. 

"A strong CPI print would be very confusing for the market, given that it's almost priced out a rate hike since last week," Tan added.

Elsewhere, the Dollar rose 0.17% against the Swiss Franc to 0.914 after falling 1.04% against CHF on Monday.