“What this whole dynamic is basically saying is trade tensions are not really improving in that regard, and we’ve seen the dollar getting hammered widely…”
The U.S. dollar dropped to a six-week low on Tuesday amid growing fears over the country’s economic stability, with analysts citing ongoing trade tensions and weak manufacturing data.
The dollar index touched 98.58 before rebounding slightly, following Monday’s report of a third consecutive month of contraction in U.S. factory activity.
“What this whole dynamic is basically saying is trade tensions are not really improving in that regard, and we’ve seen the dollar getting hammered widely,” said Rodrigo Catril, senior FX strategist at National Australia Bank.
Adding pressure, U.S. steel and aluminum tariffs are set to double Wednesday, intensifying concerns over global trade. Investors are also reacting to a looming Senate debate on a $3.8 trillion tax and spending bill expected to swell national debt.
Meanwhile, the euro briefly hit a six-week high before slipping, and currencies like the kiwi outperformed. All eyes now turn to U.S. factory orders and employment data due later this week.