Dollar Struggles Amid Trade Tensions and Fiscal Challenges
The U.S. dollar has faced declines due to President Trump's tax bill issues, trade tensions, and rising U.S. debt. Analysts forecast future weakening as current pressures, like tariffs, impact confidence. Despite some stability, global market movements and new intelligence reports continue to affect currency dynamics.
The dollar fell for the third consecutive day as President Donald Trump's efforts to persuade Republican holdouts to support his tax bill flopped, casting a shadow over currency markets. Simultaneously, traders remained uneasy about potential U.S. interference with the dollar's valuation at international finance meetings in Canada.
These currency fluctuations were part of the broader narrative of global tariff tensions, which have decelerated but loom as a December deadline nears without new agreements. Notably, negotiations with key U.S. allies Japan and South Korea have stalled, adding to the dollar's ongoing struggles and impacting investment choices worldwide.
As Treasury yields rise, the sentiment of 'sell America' appears dominant. Moody's recent U.S. debt downgrade underscores wavering faith in the dollar as a safe haven. Meanwhile, U.S. fiscal issues and poor economic forecasts put additional strain on markets. Analysts at Commonwealth Bank and others predict more substantial dollar weakening post-2026.
(With inputs from agencies.)
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