U.S. Dollar Falls Amid U.S. Fed Rate Cut Prospect

(RTTNews) - The U.S. dollar weakened against other major currencies in the Asian session on Monday, amid prospects of the U.S. Fed cutting interest rates earlier as it is feared that the U.S. trade war may hurt global growth, worsen inflation and possibly spark recessions in some countries. Traders also picked up stocks at a bargain after the recent slump in the markets.

U.S. President Donald Trump said last week that his proposed 25% tariffs on Mexican and Canadian goods will take effect on March 4 along with an extra 10% duty on Chinese imports over the fentanyl opioid crisis.

The dollar also advanced following a European summit on defense and Ukraine.

After the collapse of a hoped-for deal between Trump and Volodymyr Zelenskyy, the European Union said it is ready to work with all European partners and other allies on a peace plan to Ukraine that will ensure a just and lasting peace for Ukrainian people.

Asian markets were broadly higher after surveys showed China's manufacturing activity picked up last month.

An official factory survey showed on Saturday that China's manufacturing activity expanded at the fastest pace in three months in February. The Caixin manufacturing PMI jumped to 50.8 in February from January's 50.1.

In the Asian trading now, the U.S. dollar fell to a 4-day low of 1.0423 against the euro, from Friday's closing value of 1.0375. The greenback may test support near the 1.07 region.

Against the pound, the yen and the Swiss franc, the greenback dropped to 1.2614, 150.25 and 0.9015 from last week's closing quotes of 1.2577, 150.60 and 0.9032, respectively. If the greenback extends its downtrend, it is likely to find support around 1.29 against the pound, 148.00 against the yen and 0.89 against the franc.

Against Australia, the New Zealand and the Canadian dollars, the greenback edged down to 0.6231, 0.5614 and 1.4431 from Friday's closing quotes of 0.6207, 0.5597 and 1.4465, respectively. On the downside, 0.64 against the aussie, 0.57 against the kiwi and 1.41 against the loonie are seen as the next support levels for the greenback.

Looking ahead, PMI reports from various European economies and the U.K. for February, the Bank of England's U.K mortgage approvals data for January and Eurostat euro area flash inflation data for February are slated for release in the European session.

In the New York session, U.S. and Canada PMI for February and U.S. construction spending for January are set to be published.