The dollar index regained strength on Tuesday morning after a sharp slide to a near six week low in the previous session. The greenback came under pressure following weak economic data from US. Data showed that US manufacturing activity contracted more than expected in May. ISM said its manufacturing PMI slipped to 48.5 in May from 48.7 in April, with a reading below 50 indicating contraction. With the unexpected decline, the manufacturing PMI dipped to its lowest level hitting 48.4 in November 2024. Moreover, dollar was pressured amid remarks from Fed’s Waller that he still supports the idea of cutting interest rates later this year, even if the job market holds steady, choosing to "look through" any inflation caused by tariffs. Federal Reserve Governor Christopher Waller said that interest rate cuts remain possible later this year even with the Trump administration's tariffs likely to push up price pressures temporarily. Meanwhile, Chicago Federal Reserve Bank President Austan Goolsbee also said he continues to think the U.S. central bank will be able to lower short-term borrowing costs after the "dirt in the air" of uncertainty from tariff policies gets cleared up. Goolsbee further stated his ongoing belief that if the economy remains stable and tariffs do not prove to be as severe as announced on April 2, the Fed’s policy rate is likely to be notably lower within the next 15 months. The dollar index that measures the greenback against a basket of currencies is quoting at 98.76, up 0.13% on the day with basket currencies EURUSD and GBPUSD easing to the same tune.