The US Dollar (USD) continued to weaken against its major peers on Tuesday, with the USD Index dropping to its weakest level since early December, pressured by growing concerns over an economic slowdown. Early Wednesday, the USD struggled to find demand as market focus shifted to the ISM Services PMI and ADP Employment Change data for February.

After Monday's sharp decline, the USD Index fell nearly 1% on Tuesday. While addressing Congress at the end of the US session, US President Donald Trump reiterated that they would impose tariffs on products not made in the US. Meanwhile, during an interview broadcast on Fox News, US Commerce Secretary Howard Lutnick hinted that Trump may be prepared to reverse his own tariffs less than 48 hours after imposing them. Although these comments failed to improve the market mood, the USD failed to find any footing. On Tuesday, the Dow Jones Industrial Average (DJIA) and the S&P 500 index both fell more than 1%. Later in the day, the US economic calendar will also feature January Factory Orders data and the Federal Reserve (Fed) will release its Beige Book.

During Asian trading hours, data from Australia showed that Gross Domestic Product (GDP) grew at an annualized rate of 1.3% in the fourth quarter. This followed the 0.8% growth recorded in the previous quarter and beat market expectations of 1.2%. Meanwhile, Reserve Bank of Australia (RBA) Deputy Governor Andrew Hauser said on Wednesday morning that a measure of global trade uncertainty is at its highest level in 50 years. After rising more than 0.7% on Tuesday, AUD/USD is fluctuating in a tight channel above 0.6250 on Wednesday morning. (Newsmaker23)

Source: FXstreet