Dollar Dips as Trump Struggles to Gain Support for Tax Bill
The USD fell as President Trump struggled to gain Republican support for his tax bill. Heightened concerns over ongoing currency volatility and the U.S.'s financial policies were further emphasized by discussions at the G7 meeting. The dollar's decline is coupled with economic challenges due to existing fiscal debts and trade policies.
The U.S. dollar weakened on Wednesday, continuing its decline as President Donald Trump found it challenging to gather Republican backing for his comprehensive tax legislation. Traders were cautious amid possibilities that U.S. leaders might push for a lowered dollar value at the G7 finance meeting in Canada.
In the wake of Trump's global tariff conflict, currency fluctuations have been noteworthy, but activity slowed this week, aligning with the imminent expiry of tariff reprieves. Despite hopes for revitalizing trade, negotiations with key allies like Tokyo and Seoul seem to have stagnated.
Consequently, pressure on the dollar builds as U.S. Treasury yields climb, within a context of diminishing faith in U.S. asset stability. Analysts at Commonwealth Bank of Australia predict a future re-weakening of the dollar by 2026 as tariff issues subside. Furthermore, a Moody's U.S. debt downgrade slightly impacted markets, signaling waning confidence in U.S. economic dominance.
(With inputs from agencies.)
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