The dollar experienced broad weakness against major currencies on Tuesday, as investors positioned themselves ahead of crucial economic data releases scheduled for later in the week. Market participants are keenly awaiting these figures, which are expected to provide further clarity on the pace of economic recovery and potential inflationary pressures.

Analysts suggest that the dollar’s recent decline reflects a cautious stance among investors, who are hesitant to make significant bets before the data is released. The upcoming reports, including consumer confidence and manufacturing indices, are expected to offer insights into the strength of the economy.

Currency traders are also monitoring developments in other major economies, including Europe and Asia, for signs of divergence in economic performance. Any significant shifts in global growth outlook could further impact the dollar’s trajectory in the coming weeks.

Here are some factors influencing the dollar’s performance:

• Upcoming economic data releases
• Global economic growth outlook
• Monetary policy expectations

The dollar’s near-term direction will likely depend on the tone and content of the upcoming economic reports. Stronger-than-expected data could provide a boost to the currency, while weaker figures could lead to further declines.