In evidence of escalating concerns about the economic impact from a coronavirus outbreak in China, the US Treasury yield curve inverted on Tuesday for the first time since October 2019.

The yield differential between three-month and 10-year Treasury yields narrowed to -0.015 basis points. The yield curve inversion has mostly suggested a likelihood of US economic recessions in the past.

This has been reflective in the Fed fund futures, as markets now see a Federal Reserve (Fed) rate cut by September versus a rate cut seen in November previously.

In response to increased odds of a Sept Fed rate cut amid the US yield curve inversion has likely dragged the US dollar lower from eight-week highs of 98.03 reached against its main competitors in the last hour.

Its worth noting that the FOMC begins its two-day monetary policy review meeting later on Tuesday, with the decision likely to be announced on Wednesday at 1900 GMT.