The US dollar is trading under pressure following a deeper yield curve inversion which took place on Tuesday. At the time of writing, the US dollar index DXY is trading at around 98.08.

On Tuesday, the yield curve inversion caused a variation of 52 bp between the three-month Treasury yields and the 10-year Treasury yields, a level last seen back in March 2007, before the financial crisis. The deeper yield curve inversion has once again increased the worries of a recession in the US economy, straining the US dollar.

The US-China trade war is also weighing heavily on the greenback, ever since the US and China announced a new set of tariffs on each other’s imports. On Monday, there were some reassurances from Trump which made it seem like trade teams were keen on restarting negotiations.

However, on Tuesday, the Chinese foreign ministry dismissed Trump’s statements, adding that both sides had not been in contact. The ministry also held the US government responsible for the recent escalation in trade tensions and expressed hope that it would remedy these measures to create an appropriate environment to restart talks.