**U.S. Dollar Strengthens Amid Strong Services Data, but Trade Uncertainty Looms**

The U.S. dollar experienced a modest uptick on Tuesday, buoyed by robust services sector data, although potential trade tariff complications continue to cap gains. At 05:15 ET (09:15 GMT), the Dollar Index—a benchmark that measures the currency against a basket of six other major currencies—rose by 0.1% to 104.000, nearing a three-week high.

**Boosted by Positive Economic Indicators**

The dollar’s ascent was primarily driven by the release of encouraging services data from S&P Global’s flash U.S. PMI figures. This gain is particularly notable as it stands in contrast to economic weakness observed in both Europe and Japan. However, ongoing concerns regarding the potential impact of U.S. trade policies, spearheaded by President Trump, have clouded the outlook for the currency, contributing to inflation fears and economic uncertainty.

As analysts from ING noted, the surveys reveal a widening gap between the declining manufacturing sector and the rebounding services sector within the U.S. market. “Traders are looking for clearer signals on how to navigate activity-related USD positions. Today’s release of the Conference Board Consumer Confidence surveys is critical for the FX market, as much of the current pessimism surrounding U.S. macroeconomic trends originates from weaker consumer data,” they highlighted.

Additionally, President Trump’s recent comments regarding possible exemptions from upcoming tariff levies have provided some support for the dollar.

**European Developments and Market Sentiment**

Across the Atlantic, the euro faced pressure, with EUR/USD slipping 0.2% to 1.0786, marking its lowest level since early March as a significant rally stalled. The recent improvement in the March German Ifo consumer sentiment survey, while positive, was below forecasts following subpar PMI data reported earlier.

The geopolitical situation remains a focal point, particularly the Russia-Ukraine peace talks, with U.S. and Ukrainian representatives set to convene in Saudi Arabia. Analysts suggest that any signs of progress towards a ceasefire could bolster European sentiment and lend support to the euro.

Meanwhile, GBP/USD declined by 0.1% to 1.2913, reaching a two-week low. Attention will soon shift to the U.K., where Chancellor Rachel Reeves is anticipated to deliver her spring statement on Wednesday, likely signaling a significant downgrade to the country’s economic growth forecast.

**Yen Weakness and Asian Market Dynamics**

In Asian markets, USD/JPY edged downward to 150.62 after peaking at a three-week high of 150.92 earlier in the session, influenced by disappointing factory activity in Japan. Similarly, USD/CNY noted a slight increase of 0.1% to 7.2630.

As the U.S. dollar strengthens, Asian currencies continue to face headwinds, exacerbated by uncertainties surrounding impending trade tariffs from the U.S.

**Conclusion for Forex Traders**

As the market navigates through a patchwork of economic signals and geopolitical developments, forex traders should remain vigilant. Today’s Conference Board Consumer Confidence surveys could prove pivotal, particularly given the current sentiment surrounding U.S. economic stability. Additionally, developments in the Russia-Ukraine peace discussions may have broader implications for European currencies. Traders should keep an eye on these factors to inform their strategies in the evolving forex landscape.