European stocks began marginally higher on Tuesday, while the dollar dropped, and gold was just below an 8-month high as investors remained concerned about the prospect of Russia invading Ukraine, as reported by Reuters.  

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According to the news agency, the United States said on Sunday that Russia may attack Ukraine at any time, causing investors to liquidate risky assets this week.

On Monday, investor risk appetite rose marginally after Russian Foreign Minister Sergei Lavrov recommended that Moscow should continue along with the diplomatic option to resolve the tensions.

According to Russia's defence ministry, some troops stationed near Ukraine are returning to their bases.

After stocks fell in the US and Asian sessions, early European trade showed hints of improved optimism.

At 0839 GMT, the MSCI world equity index, which measures shares in 50 countries, was up 0.2 percent on the day, its first rise in three days after falling more than 0.9 percent, as per Reuters mentioned.

On the day, the STOXX 600 was up roughly 1.1 percent.

"Comments from the Russian Foreign Minister that there was still mileage in negotiation and similar diplomatic efforts from Western nations looks to be helping to dampen down the anxiety that has been gripping markets in recent days."

"Nevertheless, until there is some more concrete resolution to this issue, it is unlikely that we will see a strong rally in risk sentiment," wrote ING strategists Iris Pang and Robert Carnell in a client note.

German Chancellor Olaf Scholz is scheduled to meet with Russian President Vladimir Putin, as part of a frantic push by Western diplomats to try and stop a potential attack.

During the Asian session, gold, a safe-haven asset, soared to an eight-month high before pulling down as European markets opened.

Oil prices have also dropped from seven-year highs hit on Monday.

According to Reuters, investors were also interested in how major central banks planned to tighten monetary policy.

The Federal Reserve of the United States is split on how aggressively to raise interest rates.

At the Fed's March meeting, markets expect a 60.5 percent likelihood of a 50-basis point raise and a 39.5 percent chance of a 0.25 percent hike.

The dollar index fell 0.2 percent to 96.046 on the day, retreating from a two-week high set on Monday.

The euro rose 0.3 percent at $1.1341, while riskier currencies like the Australian dollar and the British pound gained ground.

Official data indicated that employment declined in the UK from October to December, while incomes fell by 0.8 percent in real terms, Reuters reported.

The 10-year Treasury rate in the United States has re-broken over 2%, while European government bond yields are up 2-3 basis points on the day.