The US dollar began the opening trading of the week with a gloomy performance as the market digested the credit rating report by the Moody's Ratings firm on the US government (US).
After a significant depreciation in value in the European session yesterday, the US dollar currency showed a recovery in the New York session to reduce by half the previous losses.
After falling to a 1-week low, investors remain cautious with the expected risk of a continued fall in the US dollar after this.
Developments after the tariff negotiations between the United States (US) and China are still being watched with early signs that tensions could flare up again.
This follows reports of China announcing tariffs on plastic copolymers imported from several countries with the US having the highest at around 75%.
In a separate report, President Donald Trump also urged restrictions on the sale of Chinese electric cars in the UK for security reasons.
Such actions will be observed with a compilation of effects that could crack the peace agreement efforts between the two giant economies before.
Market focus today (Tuesday) will be on the Reserve Bank of Australia (RBA) policy meeting which is expected to cut interest rates by 25 basis points from 4.10% to 3.85%.
A dovish follow-up statement from the central bank could add pressure to the Aussie dollar and could push it lower.
Meanwhile in the New York session tonight, attention will shift to the Canadian inflation data report which is expected to fall in the latest figures for April.
