The US dollar fell in European trade on Monday against a basket of major rivals away from two-week highs, on track for the first loss in four days on profit-taking with demand tapering off.
The risk sentiment improved in the markets after European leaders agreed on an emergency peace plan for Ukraine, and after calmer statements from Trump officials on upcoming tariffs.
Now investors await important US manufacturing data later today, expected to provide fresh pricing to the odds of a Fed rate cut in upcoming months.
The Index
The dollar index fell 0.6% today to 106.95, with a session-high at 107.56.
On Friday, the index rose 0.25%, the third rise in a row, hitting a two-week high at 107.66 on rising concerns about Trump’s tariffs.
The dollar index snagged a strong 0.9% profit last week, the first weekly profit in a month.
European Peace Plan for Ukraine
An emergency European summit was held in London and attended by 18 European leaders, including Ukrainian president Volodomyr Zelensekiy, to show strong support to Ukraine and develop a peace deal to present to Washington.
UK Prime Minister Keir Starmer said European leaders agreed on the items of the plan to support Kiev and achieve fair and lasting peace, while providing strong security guarantees.
Trump’s Tariffs
The US Trade Secretary Howard Lutnik said on Sunday that tariffs on Canada and Mexico will be implemented on Tuesday but President Trump will decide whether he’ll commit to the 25% rate.
US Rates
Recent US data showed consumer spending fell unexpectedly in January, reducing inflationary pressures on Fed’s policymakers.
Following the data and according to the Fedwatch tool, the odds of a Fed 0.25% interest rate cut rose from 4.5% to 7%.
Now traders await important US industrial data later today, important for gauging US growth in the first quarter.
