FX.co ★ Dollar Holds Decline

The dollar index remained below 97 on Tuesday after shedding more than 1% over the previous two sessions, pressured by concerns that overseas demand for dollar-denominated assets may weaken. The move followed reports that Chinese regulators had urged financial institutions to limit their holdings of US Treasuries in order to reduce concentration risk and cushion the impact of uncertain US economic policies.

At the same time, investors are focusing on delayed US employment and inflation data due this week, which could shape expectations for the Federal Reserve’s policy path. White House economic adviser Kevin Hassett said on Monday that US job gains may slow in the coming months, citing weaker labor force growth and rising productivity. The Fed is widely expected to leave interest rates unchanged in March, with markets pricing in two rate cuts later this year.