Dollar Wavers Amid Tax and Tariff Turmoil

The U.S. dollar faced challenges on Tuesday as investors worried about a significant tax and spending bill's effects on the country's debt. This added to recent declines in confidence in American assets. The euro saw gains on Monday, benefiting from U.S. President Donald Trump's decision to delay tariffs on Europe.

All eyes are on the U.S. Senate's deliberations over Trump's tax-cut bill, expected to increase the nation's debt load. The markets remain sensitive, especially after Moody's downgraded the U.S. sovereign credit rating on May 16, underscoring potential global economic weaknesses.

The euro, bolstered by comments from European Central Bank President Christine Lagarde, emerged as a potential dollar alternative. Meanwhile, concerns over fiscal deficits have led to rising bond yields worldwide. Japan's Finance Minister and BOJ Governor emphasized vigilance amid these economic shifts.

(With inputs from agencies.)