Dollar weakens

LONDON: The dollar fell for a second consecutive day and the euro gained on Tuesday after U.S. President Donald Trump escalated his trade war with China by imposing 10 percent tariffs on about $200 billion worth of Chinese imports.

While the greenback has benefited from safe-haven flows amid the escalating Sino-U.S. trade conflict in recent months, investors are starting to worry about the broader impact of the tariffs on the U.S. economy and have pushed the dollar below a key technical level.

With Beijing keeping a firm grip on the Chinese renminbi in the aftermath of the latest measures and refusing to let it weaken below a Jan. 2017 low of 6.93 yuan per dollar hit last month, sentiment was more optimistic towards emerging currencies.

"China is playing a steady hand on the currency front and the news flow out of Europe continues to be positive which is helping European currencies," said Alvin Tan, a currency strategist at Societe Generale in London.

The dollar index had popped up to 94.607 earlier in the early Asian session but quickly gave up its gains to turn lower on the day and fell 0.2 percent to its lowest since end-July at 94.35.