The US Dollar (DXY) continues its downward spiral on Tuesday, with DXY hovering near 103.40 as trade tensions escalate. United States (US) President Donald Trump's decision to hike tariffs on Canadian steel and aluminum to 50% rattled markets, adding further pressure on the Greenback. Meanwhile, in Europe, Germany's Green coalition voiced support for a defense spending bill, providing an additional boost to the Euro (EUR). US equities erased earlier gains, with the Dow Jones down over 1%, reflecting broader market concerns.
Trade dispute and policy shifts
The US-Canada trade rift intensified as President Trump moved forward with a sharp increase in tariffs on Canadian steel and aluminum, hitting 50%.
Germany's Green coalition reaffirmed its commitment to a defense spending bill, reinforcing the Euro's strength against the US Dollar.
The NFIB Business Optimism Index for February fell short, coming in at 100.7, down from the previous 102.8 reading.
The CME FedWatch Tool indicates a near certainty that rates will remain unchanged in the March 19 meeting, while the probability of a rate cut in May has climbed significantly.

Source: Fxstreet