After rising above $1.42 in February to its highest level against the dollar since April 2018, sterling lost some ground versus the greenback in March.
Investors will watch closely the monthly US nonfarm payrolls on Friday, with Federal Reserve policymakers so far citing slack in the labor market for their continued lower-for-longer stance on interest rates.
The currency had a volatile session that saw it weaken to a session low of 14.9950 before recovering, as investors continue to look to moves in global markets for direction.
The stronger dollar and rising yields, along with expectations of a strong economic recovery, sapped demand for safe-haven bullion and pushed gold prices lower.
Ships were moving through the Suez Canal again a day after tugs refloated the Ever Given container carrier, which had blocked the passage for almost a week.
Benchmark 10-year Treasury yields rose to 14-month highs on Tuesday at 1.776%, and were last up 2 basis points on the day at 1.742%.
Treasury yields are rising a day before President Joe Biden is set to outline how he intends to pay for a $3 trillion to $4 trillion infrastructure plan.
After a high of Rs 168.43 on August 20, the dollar has depreciated by Rs 15.23 so far.
As per local media reports, the trading session of the second day of the business week today, the dollar lost 95 paise in the interbank market as the dollar dropped to Rs 153.20 at closing.
In cryptocurrencies, bitcoin pushed back above $58,000 overnight after Visa Inc said it would allow the use of cryptocurrencies to settle transactions on its payment network, in the latest sign of growing acceptance of digital currencies on both Wall Street and Main Street.
The dollar index, a measure of the greenback's value against six other major currencies, hit as high as 92.919, its strongest level since November last year.
Expectations that Britain's economy will reopen quickly after its rapid vaccine rollout lifted sterling to $1.42 in February, at the time making it the best performing G10 currency.