Dollar Drifts Lower Against Major Counterparts

(RTTNews) - The U.S. dollar dropped to near 5-month lows on Tuesday on concerns about the outlook for growth and fears of a potential recession in U.S. due to the ongoing trade war.

U.S. President Donald Trump raised tariff on imports of steel and aluminum to 50% from 25%, in retaliation for Ontario slapping a 25% export tariff on electricity sent to the U.S.

However, Canada subsequently agreed to suspend the 25% hike after agreeing to meet on Thursday to discuss a pathway to renew the new North American trade agreement.

Meanwhile, a senior White House official has said the higher tariff on Canadian steel and aluminum imports into the U.S. will not become effective tomorrow.

In economic news, a report released by the Labor Department showed job openings in the U.S. increased by more than expected in the month of January.

The Labor Department said job openings climbed to 7.74 million in January from a downwardly revised 7.51 million in December.

Economists had expected jobless claims to inch up to 7.63 million from the 7.60 million originally reported for the previous month.

Markets now await U.S. reports on consumer and producer price inflation, as well as readings on consumer sentiment and inflation expectations this week for further direction.

Meanwhile, investors now expect the Fed to cut interest rates by 88 basis points this year, compared to earlier expectations for 75 basis points cut, according to LSEG data.

The dollar index, which dropped to 103.22, recovered to 103.42 as the day progressed, but still remained well below the flat line, losing about 0.41%.

Against the Euro, the dollar weakened to 1.0920. Against Pound Sterling, the dollar weakened to 1.2948.

The dollar climbed higher against the Japanese currency, fetching 147.78 yen a unit. Against the Aussie, the dollar weakened to 0.6298.

The Swiss franc weakened against the greenback at CHF 0.8826. The dollar declined marginally against the Loonie, dropping to C$ 1.4436.