The US dollar continued to decline in early trading early this week as the market is still focused on issues regarding United States (US) President Donald Trump.
The tariff war has eased slightly but there are still issues that concern investors about market stability.
Trump repeated his threat last week to fire Federal Reserve (Fed) Chairman Jerome Powell, claiming that Powell's action to lower interest rates by the end of 2024 was politically motivated.
Trump criticized Powell on Monday that the US economy will slow unless interest rates are lowered immediately.
Trump's attack on Powell has become a factor in the current market instability with investors turning to safe assets such as gold, which has created a new record high of $3,400.
Investors are beginning to doubt the central bank's stance on setting monetary policy without external pressure.
The market at the beginning of the week was still gloomy with major central banks also on vacation and a lack of economic data in focus.
However, investors will remain vigilant for any surprises in a market environment that is still shrouded in uncertainty.
Data to be released on Wednesday will measure the current health of major economies including Europe and the US through readings on the manufacturing and services sectors.
Despite a slight recovery in the US dollar in the Asian session this morning (Tuesday), the currency is still expected to be at risk of moving weaker in the following sessions.
Meanwhile, other major currencies will take advantage of this opportunity to take profits before the market situation begins to change.
