US Dollar Index (DXY) dives below 96.00 following upbeat Eurozone data

• The Dollar reaches fresh 3,1/2- year lows below 96.00.
• Renewed tariff concerns and US fiscal woes are weighing heavily on the US Dollar.
• Upbeat Eurozone manufacturing and German unemployment figures have boosted the Euro, adding pressure on the USD.

The US Dollar remains on the back foot on Tuesday, weighed by renewed concerns about the US fiscal health, growing trade uncertainty and investors' bets on Fed cuts, as President Trump continues attacking the Fed Chair, Jerome Powell.

In this context, the US Dollar Index (DXY) extended its decline for the seventh consecutive day, reaching fresh 3, ½-year lows below 96.00 as the Euro jumped following the release of upbeat manufacturing data and steady inflation figures.

Trade uncertainty is back on investors' minds

Earlier on Tuesday, Trump complained about the lack of progress in the trade talks with Japan and threatened to impose higher tariffs from July 9. These comments have crushed the moderate optimism about last week's rare earths deal with China and have increased pressure on the US Dollar.

Beyond that, the uncertainty about Trump's Tax bill, which is expected to add $3,3 trillion to the US debt pile and has triggered some divergence between republican senators, keeps weighing on the US Dollar. Growing concerns about a debt crisis in the US are keeping investors away from the US Dollar.

In this context, Trump's continuous attacks on the Fed President Powell are casting doubts about the central bank's independence and further undermining confidence in the US Dollar as the world's reserve currency.

Later today, the Fed Chairman, Jerome Powell, will speak at the central bankers' summit in Sintra, Portugal, and might give further insight into the bank's monetary policy plans. This speech, together with the US Manufacturing PMI and JOLTS Job openings data, will drive the US Dollar later today.

,