The US Dollar Index (DXY), which tracks the US Dollar (USD) against a basket of six major currencies, hit a low not seen since October 2024. The index was trading above 103.50 at the time of writing on Tuesday. The greenback faced headwinds on early European comments from Germany's Green coalition, who were said to be back on track to reach a deal on a German defense spending bill. This pushed the US Dollar (USD) lower and supported the Euro (EUR).

On the economic data front, the US JOLTS Job Openings report for January will be the main focus. Traders are already gripped by recession fears, so a further decline in job openings could add to that belief and see further downside momentum for the DXY. The US NFIB Business Optimism Index for February that was released fell to 100.7, missing estimates of 101 and further down from the previous reading of 102.8.

Daily Market Brief: Some Dots to Connect

In early European trading, a headline was published stating that the leader of Germany's Green coalition said he was hopeful for a defense spending deal this week, Bloomberg reports. The news is a 180-degree shift from the headline that triggered some US Dollar (USD) strength on Monday, where the Greens were not willing to support any defense spending deal.

At 2:00 PM, the US JOLTS Job Openings report for January will be released. Expectations are for a rise to 7.75 million jobs compared to 7.6 million in December.

Equities are trying to shake off Monday's doom and gloom. European equities are higher while US futures are in positive territory.

The CME Fedwatch Tool projects a 95.0% chance of no rate change at the Fed's upcoming meeting on March 19. However, the chance of a rate cut at the May 7 meeting has increased to 47.8% and to 89.9% at the June meeting.

The 10-year US Treasury yield is trading around 4.20%, down from a near five-month low of 4.10% hit on Tuesday last week. (Newsmaker23)

Source: FXstreet