Dollar Pressured by Fiscal, Trade Worries
The dollar index held below 99 on Tuesday, trading at five-week lows as growing concerns over the US fiscal outlook and shifting trade policies undermined investor confidence in US assets. Market attention is now focused on upcoming Senate debates over Trump’s sweeping tax cut and spending bill, which is expected to significantly expand the national debt.
According to the Congressional Budget Office, the proposed measures could add approximately $3.8 trillion to the federal government's $36.2 trillion debt over the next decade. On the trade front, Trump’s decision to postpone the imposition of 50% tariffs on European Union imports until July 9—just days after announcing they would take effect on June 1—further contributed to dollar weakness. The move boosted the euro to a one-month high, putting additional downward pressure on the greenback. Investors are also bracing for key US economic data due Tuesday, as well as fresh remarks from Federal Reserve officials Kashkari and Williams.
Source: Trading Economics
