The dollar is up slightly against its major rival Tuesday afternoon, after recovering from some early weakness. With little global economic data to drive the direction of trading, investors remained focused on trade.
President Donald Trump announced new tariffs on approximately $200 billion worth of Chinese imports on Monday, although the tariffs will initially be set at 10 percent compared to the 25 percent previously floated by the administration.
However, the tariffs are set to rise to 25 percent on January 1st, and Trump said the U.S. would impose tariffs on another $267 billion worth of Chinese imports if China takes retaliatory action.
Despite the threat from Trump, China announced it will retaliate by imposing tariffs on $60 billion worth of U.S. goods, effective September 24th.
The Chinese tariffs will reportedly range from 5 percent to 10 percent after China previously earmarked some goods for a 20 percent levy.
Homebuilder confidence in the U.S. remained firm in the month of September, according to a report released by the National Association of Home Builders on Tuesday.
The report said the NAHB/Wells Fargo Housing Market Index came in at 67 in September, unchanged from August. Economists had expected the index to edge down to 66.
Traders can look forward to the release of housing starts Wednesday morning, while existing home sales, weekly jobless claims and the Philly Fed Index will follow on Thursday.
The dollar dropped to a low of $1.1724 against the Euro Tuesday, but has since bounced back to around $1.1665.
The buck fell to a low of $1.3171 against the pound sterling Tuesday, but has since rebounded to around $1.3135.
The greenback has climbed to nearly a 2-month high of Y112.375 against the Japanese Yen Tuesday afternoon, from an early low of Y111.663.