US Dollar fluctuates amid escalating tensions between Russia and Ukraine, cooling dovish Fed bets

The US Dollar Index trades with mild gains around 106.20.

DXY is favored by a combination of factors, including Putin's threat on nuclear weapons usage.

Fed officials have cooled on aggressive easing with Powell downplaying the need to be hasty.

The US Dollar Index (DXY), which measures the value of the USD against a basket of currencies, trades with mild gains around 106.20 on Tuesday, lifted by a combination of factors. The USD initially surged following Russian President Vladimir Putin's announcement that nuclear weapons could be used in conflicts with non-nuclear states supported by nuclear powers. 

However, the Greenback has eased somewhat as the release of Chinese economic data and details of the government's stimulus package have also contributed to the USD's mild retracement.

The US Dollar remains in an uptrend, supported by strong US economic data and market uncertainty regarding Federal Reserve (Fed) interest rate cuts. Despite a recent pullback due to profit-taking, DXY has sustained its momentum and reached yearly highs near 107.00.