The dollar was down on Tuesday morning in Asia, with a triple menace of retreating yields, disappointing U.S. economic data and a drop in safe-haven demand dampening investor sentiment.

Even an overnight tech rally in U.S. markets could not convince investors to give up their bearish positions.

The U.S. Dollar Index that tracks the greenback against a basket of other currencies was down 0.22% to 92.642 by 12:21 AM ET (5:21 AM GMT).

Net bearish bets on the greenback rose to their highest levels since May 2011 during the previous week, with spot trade over the past few days suggesting that the levels have increased since.

“Extended short dollar positions risk a sharp pull back if the dollar downside stalls further, but for now the negatives for the dollar are mostly still in place,” OCBC Bank analysts told Reuters.

“We are reduced to staying in the game while the music is playing,” they added, whilst also attributing disappointing ESM index, the stalled negotiations in the U.S. Congress over the latest stimulus measures and a “limited appetite for interpreting Sino-U.S. relations as being in an outright downward spiral,” to the dollar’s gloomy outlook.

U.S. data released on Tuesday also disappointed investors, with the Empire State Manufacturing (ESM) index diving to 3.7 in August and missing the forecasted 15 points prepared by Investing.com as well as July’s reading of 17.20.

The USD/JPY pair fell 0.30% to 105.67.

The AUD/USD pair edged up 0.10% to 0.7221. Across the Tasman sea, the NZD/USD pair edged down 0.18% to 0.6545, with New Zealand continuing its battle against a fresh outbreak of COVID-19 in the country.

The USD/CNY pair was flat, inching up 0.02% to 6.9303. Investors are keeping an eye on the latest round of U.S.-China tensions after the U.S. Commerce Department on Monday further restricted Chinese tech company Huawei’s access to commercially available chips. The department added 38 Huawei affiliates in 21 countries to an economic blacklist, with these latest measures in addition to the restrictions announced by the U.S. in May.

The GBP/USD pair gained 0.24% to 1.3134, with the U.K and the European Union are scheduled to commence the latest round of Brexit negotiations on Tuesday.

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