The US dollar fell in European trade on Tuesday against a basket of major rivals, extending losses for the third straight session amid renewed concerns about a US recession due to President Trumps tariffs.

Later today and tomorrow, the Federal Reserves policy meeting is expected to provide clues on the path ahead for US interest rates.

The Index

The dollar index fell 0.35% today to 99.50, with a session-high at 100.10.

On Monday, the index lost 0.25%, the second drop in a row on profit-taking away from a three-week high at 100.38.

Trumps Tariffs

On Sunday, Trump announced a 100% tariff on movies made abroad, but didnt reveal the mechanism of collecting the fees, and on Monday, he announced plans to impose tariffs on pharmaceuticals in the next two weeks.

The Fed

Today, the Federal Reserve will convene and discuss monetary policies, expected to hold interest rates unchanged.

The Feds monetary statement and Chair Powells subsequent press conference will likely provide clues on the path ahead for policies.

US President Donald Trump continued to pressure Powell to cut interest rates, however he said wont fire him before the end of term in May 2026.

According to the Fedwatch tool, the odds of a Fed 0.25% rate cut in May stood at just 8%.

The odds of such a cut in June stood at a healthier 65%.

Goldman Sachs said in a memo that Fed officials would like more evidence from the labor market and other sectors before deciding to cut interest rates, with the bank expecting three 0.25% rate cuts in July, September, and October.

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