NEW YORK (Reuters) - The dollar hit a one-month peak against a basket of currencies on Tuesday, as China and the United States discussed plans for talks to avert a trade war between the world’s two biggest economies.

Wads of British Pound Sterling banknotes are stacked in piles at the Money Service Austria company's headquarters in Vienna, Austria, November 16, 2017. REUTERS/Leonhard Foeger

The sterling sagged to 20-month lows after a report that said colleagues of Prime Minister Theresa May believed they had sufficient numbers to mount a no-confidence vote in her leadership, stoking anxiety about a chaotic British exit from the European Union.

“The prospects for U.S. and China have brightened. That’s a relief for the dollar,” said Peter Ng, senior foreign currency trader at Silicon Valley Bank in Santa Clara, California.

White House officials and China’s commerce ministry said Chinese Vice Premier Liu He, U.S. Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer spoke on a telephone call on Tuesday, but offered no details what they discussed.

Still the call was seen as a step to ratchet down trade tension between Beijing and Washington, soothing worries about an all-out trade war between the two nations that would hurt global economic growth, analysts said.

An index that tracks the greenback against six major peers .DXY was up 0.18 percent at 97.396. Earlier Tuesday, it touched 97.545, which was the highest since Nov. 28.

Positioning data released late Monday suggested the dollar may fall as speculators increased their net long bets in the greenback to their highest level since December 2016.

The sterling steadied following steep losses on Monday in reaction to May cancelling a parliamentary vote on her Brexit agreement to seek more concessions.

British broadcaster Sky’s deputy political editor cited sources saying lawmakers in May’s Conservative Party were “pretty confident” they had the 48 letters needed to trigger a no-confidence vote, while other media outlet reported that level has not been reached.

The sterling was down 0.29 percent at $1.2523 after falling to $1.249, which was the lowest since April 2017.

The euro edged up 0.03 percent at 90.43 pence after reaching 90.875 pence, which was its strongest since Aug. 28.

The single currency was also bogged down by concerns over protests in France against inequality and President Emmanuel Macron’s economic reforms.

Investors were also focused on the European Central Bank’s economic assessment of the euro zone, due on Thursday.

Fitch Ratings’ chief economist Brian Coulton said the ECB as expected would signal the end of its asset purchases, but will unlikely hint at a rate hike anytime soon given the recent batch of softer-than-expected economic data across the euro zone.

The euro was 0.26 percent lower at $1.1325 and down 0.24 percent at 128.44 yen.