The dollar retreated slightly on Tuesday but held most of its gains on lingering optimism over a tariff deal between the United States and China, which tapped the brakes on a trade war between the world's two largest economies.

The dollar jumped and government bonds sold off as markets reacted to a de-escalation in the trade war between China and the US, which agreed to temporarily lower some tariffs for 90 days.

One glance at BofA’s currency and rates sentiment survey would have indicated a sharp reversal was imminent in the event of any positive macro developments.