The dollar declined on Tuesday after a report indicated a slowdown in manufacturing activity. This news fueled worries about the overall health of the U.S. economy. The Institute for Supply Management’s index fell more than anticipated, triggering a sell-off of the U.S. currency.

The euro gained against the dollar, as did the Japanese yen and the British pound. Analysts suggest that the weak manufacturing data may prompt the Federal Reserve to adopt a more cautious approach to raising interest rates in the coming months. Higher interest rates typically make a currency more attractive to investors.

Market participants are now closely watching upcoming economic releases for further clues about the direction of the U.S. economy and the Fed’s monetary policy plans.