USD index falls across Asian session as risk sentiment improves

The US dollar lost ground broadly during Tuesday's Asian trading session, with the DXY index declining 0.3% to 106.85 as improved risk appetite weighed on the safe-haven currency. Major pairs saw notable movements, with EUR/USD gaining 0.25% to 1.0475, GBP/USD advancing 0.35% to 1.2680, and AUD/USD climbing 0.45% to 0.6520. The dollar weakness comes despite elevated Treasury yields, suggesting markets are focusing more on global growth prospects than interest rate differentials. Asian equity markets posted modest gains, with the Nikkei up 0.6% and Shanghai Composite rising 0.4%, supporting risk-sensitive currencies. The New Zealand dollar outperformed, rising 0.5% against the USD to 0.5780 ahead of RBNZ policy expectations. Technical analysis shows the DXY approaching key support at 106.50, with a break below potentially opening the path to 106.00. Traders await Wednesday's US durable goods data for further direction.