The UK's FTSE 100 Index slipped 0.2 per cent, while France's CAC40 Index declined 0.7 per cent, and Germany's DAX Index fell 0.8 per cent.
U.S. POLITICS: A decision by Republican Party leaders in the Senate to put off until after their July 4 recess a vote on a health care overhaul bill spurred a sell off. By late afternoon it was down 0.6 percent at 25,683.50 while Japan's benchmark Nikkei 225 index lost 0.5 percent to 20,130.41.
Meanwhile German 10-year bond yields, the European benchmark, surged from 0.238 per cent to reach highs of 0.405 per cent, the highest in a month.
USA stock indexes edged lower in early trading Tuesday, led by declines in phone and utilities companies.
This was very hawkish for the euro and the simmering strength helped it to push the pair higher towards 1.1250 and beyond. The euro had touched a high of around 127.47 yen on Tuesday, its strongest level since April 2016.
Investors had been selling government bonds and buying the euro following comments from ECB President Mario Draghi on Tuesday that highlighted a "strengthening and broadening" eurozone economic recovery that many took that as a sign that the central bank was preparing to trim its EUR60 billion of monthly bond purchases. The head of the Federal Reserve, Janet Yellen, and one of her lieutenants, Patrick Harker, said on Tuesday that they expected to continue raising USA interest rates, but it couldn't rally the dollar.
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The delay of the healthcare vote eroded expectations that President Donald Trump can succeed at realizing his agenda of tax reform and infrastructure spending, analysts said.
Crude oil was on track to rise for the fourth straight day although concerns over a festering supply glut capped prices. It was last steady on the day at $1.1180, above its overnight low of $1.1172.
That helped drive the yield on the United States 10-year up 6.6 basis points to 2.2% - the highest since before the Fed's interest rate rise on June 14. The yield on the 10-year note was at 2.232% recently, compared with 2.135% at Monday's close. US gold futures for August settled up 0.04 percent at $1,246.90. It slid to 1.4% in May, some way below the ECB's target of just below 2%.
Brent crude futures were down 0.2 per cent at $46.55 per barrel.
Tim Evans, Citi Futures' energy futures specialist, said in a note that oil's move was "a technical correction after the declines of the past five weeks" helped along by boosts from a weaker dollar and forecasts for a weekly draw in USA crude inventories.