The dollar index remained around 106.5 on Tuesday, after losing nearly 1% in the previous session, pressured by a strengthening euro and sterling amid growing hopes for a Ukraine peace deal.

European leaders, led by the UK and France, pledged increased fiscal spending and announced plans to present a Ukraine peace proposal to the US. Concerns about the US economy and expectations of further interest rate cuts by the Federal Reserve also weighed on the dollar. The latest ISM report showed that US manufacturing slowed more than expected in February, driven by easing demand, slower production, and rising prices, partly due to tariffs.

Investors are now focused on Friday's monthly jobs report for fresh insights into the labor market. Meanwhile, the dollar strengthened against the Mexican peso and Canadian dollar after President Trump confirmed that 25% tariffs on these countries would take effect as planned.

Source: Trading Economics