The US Dollar weakened on Tuesday as risk sentiment improved, driven by a recovery in Chinese stocks and anticipation of economic measures from the People’s Bank of China (PBoC) and the State Administration of Foreign Exchange (SAFE). Bloomberg’s report on the Trump administration’s potential gradual tariff implementation further pressured the Greenback, while traders adjusted positions ahead of the US Producer Price Index (PPI) release and Federal Reserve officials’ speeches. Treasury yields also retreated, contributing to the Dollar’s decline.
Key currency pairs showed mixed performance. USD/JPY fell near 157.50 after Bank of Japan Deputy Governor Ryozo Himino hinted at a potential rate hike. AUD/USD hovered around 0.6200, supported by Chinese stimulus hopes but constrained by Fed-RBA policy divergence and US-China trade risks. EUR/USD recovered above 1.0250 as a pullback in the Dollar and lower US yields offset dovish ECB comments. GBP/USD regained ground above 1.2200 after hitting a 15-month low on Monday, weighed by UK fiscal challenges. USD/CAD remained below 1.4400 amid falling oil prices.
Meanwhile, Gold prices aimed to retake the $2,700 level, supported by technical factors and the broader risk-on mood in the markets.


