Flat at the opening of the week, the US dollar then began to show strengthening in trading in the European session yesterday.
However, the king of currencies failed to maintain the positive momentum when it experienced a re-depreciation in the New York session.
The trade war tension between the United States (US) and China is now the main focus of the market while the development of the US government shutdown situation remains monitored.
President Donald Trump has announced an additional 100% tariff on Chinese imports that will take effect on November 1, in response to China restricting rare earth exports.
China has not decided on retaliatory action while the US has stated that the door to negotiations is still open for China.
Chinese inflation data will be the focus of publication in the Asian session today (Wednesday) for investors to assess the health of the world's second largest economy.
The US dollar's renewed weakness gives room for major currencies to 'breathe' again after the pressure from last week.
The euro recovered slightly on developments in France as the government proposed postponing the landmark pension reform until the 2027 presidential election.
The pound fell sharply in the European session yesterday, affected by a lackluster jobs report. The UK unemployment rate rose to 4.8% in August, the highest in 4 years.
The Aussie and Kiwi dollars were also hit by a fresh multi-month low amid volatile market sentiment.
Meanwhile, the yen has recovered slightly this week from its previous week's decline as the market reacted to Sanae Takaichi's victory in the leadership election of Japan's Liberal Democratic Party.
