The Euro experienced a strong surge in value at the opening of the week yesterday driven by hopes for a peace agreement in Ukraine.
On the contrary, the US dollar weakened significantly in trading performance yesterday Monday as analysts expected the king of currencies to dominate the market.
The expectation was due to the Mexican and Canadian tariffs announced by President Donald Trump to begin today (Tuesday) in addition to the tension between his meeting with Ukrainian President Volodymyr Zelenskiy over the weekend.
The Canadian dollar fell to a 4-week low ahead of the implementation of the tariffs.
Expectations for the US dollar to continue the strengthening pattern of last week appeared to be misplaced with a significant price change occurring at the opening of March trading.
ISM manufacturing PMI data published in the New York session yesterday showed that manufacturing activity in the United States (US) was still growing well in February with the figure remaining above the 50 point level although slightly lower than forecasts and readings from the previous month.
European leaders have shown support for a bailout for Ukraine, restoring previously risk-off market sentiment and reducing the appeal of the US dollar.
This follows a tense situation at the White House when President Zelenskiy's visit to discuss a mineral deal with Trump did not end well.
In addition to European leaders, the ruler of the United Kingdom, King Charles, has also supported Zelenskiy in his efforts for a peace deal.
Analysts see a Ukrainian peace deal, if reached, as having the potential to increase fiscal spending in the eurozone, boosting economic growth and supporting the currency.
