The US House of Representatives is preparing to vote on the Senate's "fiscal cliff" bill, Democratic Representative Alcee Hastings said on Tuesday, increasing the odds that Congress will stave off steep tax hikes and spending cuts.

The safe haven dollar edged lower, with the greenback falling 0.4 percent against a basket of major currencies to 79.466.

The Australian dollar, a currency that tends to benefit when optimism about the outlook for the global economy increases, rose 0.6 percent to $1.0463.

"The mood now is that it will pass," said Satoshi Okagawa, senior global markets analyst for Sumitomo Mitsui Banking Corporation in Singapore, referring to the prospects for a deal on the "fiscal cliff".

"If a fog caused by the fiscal cliff disappears, there will probably be moves toward putting risk back on," Okagawa said.

The yen retreated broadly and fell to its lowest level in more than two years versus the dollar.

The dollar rose to as high as 86.970 yen on trading platform EBS as of 0153 GMT, the greenback's highest level versus the Japanese currency since July 2010.

The euro climbed above 115.00 yen for the first time since July 2011, and was last up 0.9 percent at 115.44 yen.

The euro rose 0.5 percent against the dollar to $1.3265.

Center>Copyright Reuters, 2013