The US Dollar comes under pressure and declines sharply as the tariff war erupts.

• The US Dollar extends its decline on Tuesday following an already weak performance on Monday.
• Traders are offloading the Greenback as the US imposes tariffs while simultaneously facing retaliatory measures from Canada and China.
• The US Dollar Index (DXY) struggles to find support and remains vulnerable to further downside.

The US Dollar Index (DXY), which measures the USD’s performance against six major currencies, is slipping below the 106.00 level on Tuesday after US President Donald Trump confirmed that tariffs on Canada, Mexico, and China would proceed as planned without any delays. On Monday, markets speculated whether Trump might grant a last-minute extension, but the decision to enforce the previously announced tariffs came as no surprise.

Meanwhile, Canada and China have already retaliated against the US’s unilateral tariffs. Late Monday, Canadian Prime Minister Justin Trudeau announced countermeasures, stating, “Canada will impose 25% tariffs on US imports worth C$30 billion starting Tuesday,” with additional tariffs on C$125 billion of goods set to take effect in 21 days.

Early Tuesday, China unveiled its tariffs on US agricultural products. The country’s Commerce Ministry announced that it would impose additional levies of up to 15% on key US farm imports, including chicken, pork, soy, and beef. These tariffs are set to take effect on March 10.

Equities appear to have already factored in the latest tariff developments, showing minimal fluctuations. While European markets face mild selling pressure, US equity futures point to a positive opening.

The US 10-year yield hovers near 4.15%, extending its decline from last week’s peak of 4.574% and approaching a five-month low.