Dollar Dips Amid Fiscal Concerns and Trump's Fed Feud

The U.S. dollar saw a downturn on Tuesday, largely affected by fiscal uncertainties surrounding President Trump's extensive tax-cut and spending proposal. The currency's value declined significantly, particularly against the Japanese yen and the Swiss franc, as trade deal concerns added to market trepidation. The Senate's questionable progress with Trump's budget bill has left investors apprehensive, diversifying to mitigate financial risks.

As party divisions arise over the bill's potential $3.3 trillion debt addition, the dollar tumbled 0.6% against the Swiss franc to a 10-year low and 0.8% against the yen, approaching a one-month low. The yen boasted its strongest half-year growth since 2016, while the euro surged, marking its best-ever first-half performance, LSEG data indicated.

Meanwhile, Trump's persistent criticism of the Federal Reserve's independence, echoed through handwritten notations to Chair Powell, has spurred concerns over monetary policy's influence on U.S. dollar stability. Investor focus turns to Powell's upcoming address at the ECB forum in Portugal, with market players betting on potential rate cuts amid looming economic data releases.

(With inputs from agencies.)