The US Dollar weakens as US Treasury yields decline

• The US Dollar edges slightly lower following overnight developments.
• The Trump administration intensifies pressure on China by seeking third-party tariffs and imposing semiconductor restrictions.
• Meanwhile, the US Dollar Index (DXY) declines ahead of the US trading session.

The US Dollar Index (DXY), which measures the USD against six major currencies, weakens ahead of the US trading session as markets absorb recent developments. Investors are easing their rush into safe-haven bonds, leading to a decline in US Treasury yields. Meanwhile, equities in Europe and the US are rebounding, following a more than 1% decline in Asian markets earlier in the day.

The market downturn follows the Trump administration’s release of additional details regarding its plan to tighten semiconductor restrictions on China. Furthermore, the U.S. is urging its allies to implement similar tariffs on China in an effort to exert economic pressure. Bloomberg reports that Trump aims to slow China’s technological advancement.

Meanwhile, the U.S. economic calendar is presenting noteworthy data points. Key sentiment indicators, including February’s Consumer Confidence report and the Richmond and Dallas Fed Manufacturing indexes, could offer insights into current U.S. economic activity. Later in the day, speeches from Fed Vice Chair for Supervision Michael Barr, Richmond Fed President Tom Barkin, and Dallas Fed President Lorie Logan are expected.

Equities are beginning to rebound ahead of the U.S. trading session, with European markets also shifting into positive territory.

The U.S. 10-year yield hovers around 4.33%, extending its decline from last week’s peak of 4.574%.