Oil prices rose on Tuesday, recovering a measure of steep losses from the prior session, although caution ahead of upcoming U.S. inflation data and the conclusion of a Federal Reserve meeting kept markets on edge.

The euro zone has slipped into recession and Chinese data has disappointed, warning signs for world markets relieved that the March banking turmoil has not led to a full on credit-crunch and a U.S. debt ceiling crisis has been averted.

The dollar edged broadly lower on Tuesday but traded in a narrow range, as investors remained cautious ahead of key U.S. inflation data due later in the day just as the Federal Reserve kicks off its two-day monetary policy meeting.

Asian shares edged up in early trade on Tuesday, following an upbeat session on Wall Street while investors turned their attention to key U.S. inflation data and the Federal Reserve's interest rate decision this week.

China's central bank lowered a short-term lending rate for the first time in 10 months on Tuesday, in a bid to restore market confidence and prop up a stalling post-pandemic recovery in the world's second-largest economy.

The U.S. budget deficit swelled in May from a year earlier as revenue tumbled and Medicare spending surged, the Treasury Department said on Monday in its first monthly accounting of the government's finances since a deal was reached to suspend the debt limit and avoid a first-ever federal default.