By Karen Brettell

(Reuters) -The U.S. dollar fell on Tuesday as Federal Reserve Chair Jerome Powell said the U.S. central bank was in no rush to cut its short-term interest rate again and as traders waited on more concrete information regarding potential trade tariffs by U.S. President Donald Trump.

Powell said in testimony before the Senate Banking, Housing and Urban Affairs Committee that the view on rates reflected the U.S. economy being "strong overall," with low unemployment and inflation that remains above the Fed's 2% target. The comments were largely expected by traders.

He also told lawmakers the argument for free trade still makes sense but added that it was not the role of the Fed to comment on tariff or trade policy but to react to how it impacts the economy.

"He's trying to be very, very, very conservative in his commentary and not spook anybody," said Helen Given, FX trader at Monex USA in Washington.

Traders are becoming more immune to news around potential tariffs, which have unnerved investors on concerns about how they may impact inflation and growth.

"We've seen a lot of volatility come off of tariff headlines in the last two weeks," said Given. "What we're seeing now is that those headlines and those announcements are not necessarily an indication that these tariffs are actually going to be levied, at least not at the time that we think that they might be. So, everyone is just in a wait and see mode."

Futures priced in 36 basis points worth of Fed rate cuts by the year-end, little changed from before Powell's comments, which implies one 25-bp cut and only a partial chance of a second.

Powell will also testify before the House Financial Services Committee on Wednesday.

Consumer price data for January due on Wednesday is this week's main U.S. economic release and is expected to show inflation remained sticky during the month.

The U.S. dollar index was last down 0.37% on the day at 107.96.

Tariffs are likely to remain a key focus for traders on any signs that trade tensions are intensifying.

"The threat of more U.S. tariffs remains, also against the European Union. Retaliation could even lead to a tail risk scenario of a global trade war," said Athanasios Vamvakidis, global head of forex research at BofA.

"Even if the worst is avoided, we are concerned that prolonged uncertainty will have negative implications for the global economy," he added.

Trump on Monday said he would announce plans to impose reciprocal tariffs on other countries over the next two days, doubling down on comments he made on Sunday.

On Sunday Trump said he would introduce new 25% tariffs on all steel and aluminum imports into the U.S., on top of existing metals duties.

The European Union said it would respond with "firm and proportionate countermeasures".

The euro was last up 0.49% at $1.0357.

The Canadian dollar strengthened 0.14% versus the greenback to C$1.43 per dollar, bouncing back from earlier losses.

Canada, Brazil, Mexico, South Korea and Vietnam are the biggest sellers of steel into the U.S., according to American Iron and Steel Institute data, while Canada is the dominant supplier of imported aluminum.

The Japanese yen weakened 0.3% against the greenback to 152.45 per dollar. It hit 150.93 on Friday, its highest since December 10.

The Australian dollar rose 0.29% versus the U.S. currency to $0.6293.

Australian Prime Minister Anthony Albanese said on Tuesday Trump has agreed to consider exempting Australia from his steel and aluminum tariffs, in what Albanese called a constructive phone call with the U.S. president.

In cryptocurrencies, bitcoin fell 2.26% to $95,204.76.

(Reporting by Karen Brettell; Additional reporting by Stefano Rebaudo; Editing by Bernadette Baum, David Evans, Christina Fincher and Sandra Maler)