The weakness in the US dollar continues into Tuesday over diminishing hopes for a US-China trade deal anytime soon, souring the market sentiment and weakening the demand for the USD. At the time of writing, the US dollar index is trading at around 97.84.

Markets have been widely anticipating that the “phase one” trade agreement could be signed soon, but mixed signals about the latest rounds of discussions are keeping the market sentiment under pressure. The US dollar has also weakened after a decline in US Treasury yields, driven by rising uncertainties surrounding the resolution of the US-China trade war.

On Monday, a CNBC report revealed some hesitation from the Chinese side towards signing a trade deal, which brings the trade war back in focus once again. A source in China’s government stated Trump’s disinterest towards removing tariffs in a phased manner as the reason for China getting cold feet about finalizing and signing the interim trade deal as agreed last month.

In addition, Trump’s repeated attacks on the Fed expressing dissatisfaction about rate cuts have also kept the dollar under pressure. Even though the Fed has cut interest rates thrice this year, Trump has criticized the Fed’s stance, accusing it of keeping the dollar strong, which puts it at a disadvantage in global trade against other economies.