Asian currency markets held steady Tuesday supported by optimism around the dollar

Asian currency markets remained stable on Tuesday's trade, helped by the US dollar's strengthening safe-haven status as the policy stalemate in Washington over the US debt ceiling continues.

The Dollar Index traded mostly flat at 102.250. The potential for default on US debt if a deal is not done to raise the nation's borrowing limit, which Treasury Secretary Janet Yellen reiterated could be hit as soon as June 1, has helped the dollar push higher of late, with traders looking to the greenback given it is often used as a a safe haven in times of stress.

Additionally, traders are likely to focus on the release of US retail sales data for April, which is expected to show sales growing 0.8% in April, an improvement from last month's dramatic 0.6% slump.

The Federal Reserve raised interest rates last week for the 10th time in a row, but signaled that it may rest on aggressive policy tightening as it studies incoming economic data and assesses the impact of tightening to date.

Inflation remained high in April, even if slightly lower than the previous month, and a number of Fed officials have said in separate speeches that rates are likely to remain higher for longer if prices continue to hold substantially above the Fed's 2% target.

EUR/USD was up 0.1% to 1.0880, having bounced from a five-week low overnight, ahead of the release of first-quarter growth data for the eurozone.

This is expected to show barely scratched the region's growth in the first three months of the year, up 0.1% on the quarter and 1.3% on a yearly basis.

Also of interest is Germany's ZEW economic sentiment index for May, which is expected to show a decline in sentiment in the euro zone's largest economy.

GBP/USD fell 0.3% to 1.2494 after the UK unemployment rate unexpectedly rose to 3.9% in the three months to March, increasing the chances of the Bank of England halting interest rate hikes at its next meeting in June.

USD/JPY fell 0.3% to 135.78, AUD/USD fell 0.3% to 0.6683, while USD/CNY rose 0.2% to 6.9643 as the yuan traded near a two-month low after the data China showed industrial production and retail sales growing less than expected in April.