Dollar Weakens as Sentiment on US Assets Remains Weak
The Bloomberg Dollar Spot Index fell 0.3% in Asia trade, the index is set for a weekly loss
President Donald Trump’s tax bill heads to the Senate amid concerns over ballooning US debt
“The USD weakness could be driven by lingering concerns over the debt problem,” said Ken Cheung, head of Asia FX strategy at Mizuho Bank
The tax cut bill poses a dilemma for USD assets if passed, it could add several trillion to debt over a decade, if not passed, the fiscal cliff without tax cuts could trigger the country’s recession risk
“The current market environment is still geared towards fading the USD rally, given ongoing concerns over the US economic outlook from tariffs and now geopolitical risks and fiscal concerns,” said Felix Ryan, an analyst at ANZ in Sydney
An upside surprise in US data, unless sustained, is unlikely to shift negative sentiment on the greenback for now
GBP/USD rose 0.2% to 1.3450
April retail sales data is due on Friday
AUD/USD rose 0.4% to 0.6435
EUR/USD up 0.3% to 1.1319
European Central Bank President Christine Lagarde warned that international trade will be forever changed by tensions over tariffs, even as the world's leading economies move toward some compromise
USD/JPY down 0.4% to 143.47
Japan's main inflation gauge accelerated to its fastest pace in more than two years, with soaring rice prices exacerbating Prime Minister Shigeru Ishiba's troubles after a cabinet reshuffle over controversial comments by his agriculture chief about the country's staple food
Source: Bloomberg
