USD traded lower against most other major currencies in the European session on Tuesday as investors expect that global coronavirus outbreak could prompt the U.S. Federal Reserve to cut interest rates to curb potential economic fallout from the virus. 

The dollar index edged down by 0.1% to 99.31.

Fed officials flagged coronavirus risk at their January meeting but noted it was too early to say whether the virus effects on the U.S. economy would be material. 

Anyway, market participants have been placing increasing bets on rate cuts later this year in interest-rate futures markets. According to the CME FedWatch Tool, traders are now pricing in a 52% chance of an interest rate cut at the Fed’s April meeting. They also assign a 37% chance of three cuts by the end of the year.