(fxcue news) - The U.S. dollar drifted lower on Monday, losing ground against almost all its major counterparts, amid rising concerns about global growth, and prospects of a rate cut by the Federal Reserve earlier than expected. The levy of fresh tariffs against Canada, Mexico and China, that are set to become effective from Tuesday (March 4). During an appearance on Fox News over the weekend, Commerce Secretary Howard Lutnick described the proposed 25% tariffs on imports from Mexico and Canada as "fluid" but said the additional 10% tariff on imports from China is "set." Trump later clarified that the 25% tariffs on imports from Mexico and Canada will take effect tomorrow and reciprocal tariffs on other U.S. trade partners will be imposed on April 2nd. On the U.S. economic front, the Institute for Supply Management released a report showing its reading on U.S. manufacturing activity edged slightly lower in February but still indicated growth in the sector for the second straight month. The ISM said its manufacturing PMI slipped to 50.3 in February after rising to 50.9 in January, although a reading above 50 still indicates growth. Economists had expected the index to dip to 50.5. The report also said the prices index surged to 62.4 in February from 54.9 in January, reflecting the largest month-over-month increase since January 2024. "Prices growth accelerated due to tariffs, causing new order placement backlogs, supplier delivery stoppages and manufacturing inventory impacts," said Timothy R. Fiore, Chair of the ISM Manufacturing Business Survey Committee. He added, "Although tariffs do not go into force until mid-March, spot commodity prices have already risen about 20 percent." A separate report released by the Commerce Department showed construction spending in the U.S. unexpectedly edged modestly lower in the month of January. The dollar index dropped to 106.47 in the New York session today, and edged slightly up from that level to 106.56, still languishing well below the flat line, losing nearly 1%. Against the Euro, the dollar weakened to 1.0489. Against the Japanese currency, the dollar shed ground and fetched 149.53 a unit, down sharply from previous closing value. The dollar eased to 1.2701 against Pound Sterling, and against the Aussie, it declined slightly to 0.6226. The Swiss franc gained against the greenback, firming to 0.8967, while the Loonie weakened against the dollar to C$1.4484.