On Tuesday, the US dollar only rebounded slightly in morning trading, failing to significantly recover from the sharp decline seen in the previous trading day.

"The initiative in negotiations lies with Asian countries, and the U.S. side will not unilaterally concede," Bessent pointed out in an interview on Monday, which was another confusing signal regarding the progress of trade negotiations recently.

The U.S. dollar rose 0.11% against the Japanese yen to 142.19 yen, but had previously fallen by 1.2%; the U.S. dollar rose 0.18% against the Swiss franc to 0.8217. after a 0.8% decline on Monday.

Part of the reason for the slight improvement in market sentiment is the U.S. government's plan to take measures on Tuesday to mitigate the impact of auto tariff policies.

Carol Kong, a foreign exchange strategist at the Commonwealth Bank of Australia (CBA), said, "Given the mixed signals, I think the possibility of reaching an agreement in the short term is very low."

She added, "The overall U.S. tariff policy is extremely chaotic, and the market is very upset about it. However, there are indeed some signs indicating that the worst phase may have passed."

Despite the lack of substantial progress in trade negotiations, both sides seem to be softening their stances in recent days. The U.S. has expressed willingness to partially reduce tariffs, while Asian countries have exempted some U.S. products from a 125% tariff.

In terms of major currency pairs, the euro fell 0.15% to $1.1404. but it is still expected to record its largest monthly gain in nearly 15 years this month, as investors shift away from U.S. assets and towards European assets.

The market is also focusing on the dense release of U.S. economic data this week, which will serve as early signals to assess the actual impact of Trump's trade policies. In particular, Friday's non-farm payrolls report, the initial estimate of first-quarter economic growth, and the Federal Reserve's preferred core PCE inflation data are closely watched by the market.

Carol Kong also pointed out, "I think U.S. economic data will further deteriorate from here."

"Once weak data is released, it will further weigh on the dollar, as investors no longer consider the dollar a reliable safe-haven currency but instead start to exhibit trading characteristics of a risky asset."

From a daily chart perspective, the U.S. Dollar Index (DXY) is currently oscillating near 99 after a series of declines, showing an overall weak pattern. The short-term 5-day and 10-day moving averages continue to decline, with a clear bearish crossover, and rebounds are limited to the 99.40 area. The 20-day moving average has flattened out from an upward trend, indicating that the medium-term trend is also gradually weakening.

In terms of technical indicators, the RSI (14) is currently near 38. close to the oversold area. Although there is a demand for a technical rebound in the short term, its strength is limited. The MACD indicator shows expanding green bars, and the fast and slow lines continue their downward trend, reflecting that bearish momentum still dominates.

Key support below is at the 98.60 level. If this level is breached, it will open up further downside potential towards the 98 level. Preliminary resistance above is in the 99.40-99.60 area. Overall, the daily structure of the U.S. Dollar Index is bearish, with limited short-term rebound potential, and the trend still tends to oscillate downwards.

Editor's Viewpoint:

Under the dual pressures of repeated uncertainties in global trade and expectations of weak U.S. economic data, the traditional safe-haven status of the U.S. dollar is being challenged. The daily technical indicators further confirm the bearish trend in fundamentals, and the U.S. Dollar Index may continue to test key support areas in the short term.

Caution is warranted as sustained weakness in U.S. data could push the dollar into a larger downward cycle.