The U.S. dollar fell further Wednesday, continuing to head lower on uncertainty over President Donald Trump's tax bill, while sterling jumped after a hot inflation report.
At 04:30 ET (08:30 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, fell 0.4% to 99.595, extending a 1.3% two-day decline.
U.S. tax bill, G7 meeting in focus
President Donald Trump's tax cut and spending bill has apparently run into opposition from several dissenting lawmakers, and faces a critical stress test on Wednesday as Republicans in the U.S. House of Representatives try to overcome internal divisions.
The bill, if approved, could add $3 trillion to $5 trillion to the country's debt, according to nonpartisan analysts, and comes after Moody's downgraded its U.S. credit rating by a notch last week over growing national debt.
Ballooning fiscal debt, trade frictions, and weakened confidence have dragged the dollar around 8% lower so far this year.
Traders are also wary of holding dollars ahead of the Group of Seven finance ministers' meetings currently underway in Canada, which will end on Thursday
"There is a low probability-high impact of any suggestions that the G7's longstanding commitment to allow free floating of exchange rates might be revised to allow dollar weakening," said analysts at ING, in a note.
"If current speculation proves accurate – and the U.S. is pushing for stronger trading partner currencies – it could not only prompt sharp appreciation in those currencies but also weigh on the dollar more broadly."
Sterling gains on hit inflation release
In Europe, GBP/USD rose 0.2% to 1.3419, with sterling surging after data released earlier Wednesday showed that British inflation surged by more than expected in April.
The annual rate of consumer price growth leapt to 3.5% in April from 2.6% in March, the Office for National Statistics said, the highest reading since January 2024 and the largest increase in the rate since 2022 when inflation was rocketing.
However, "a closer look at the data shows that most of the jump can be traced back to a spike in road tax, which had an outsized effect, along with higher airfares and package holiday prices, both of which were skewed by the timing of Easter and the specific measurement day in April," ING said.
"While expectations for a June hold are all but cemented, it doesn't look like enough to dismiss an August cut."
EUR/USD traded 0.4% higher to 1.1324, with the euro benefiting from traders looking for alternatives for the weakening dollar.
The euro gained despite a conversation between U.S. President Donald Trump and Russian President Vladimir Putin yielding no progress in ending the war in Ukraine.
"The next key level is 1.150, but markets may want to back such a level with softer US data and perhaps a more optimistic story on Russia-Ukraine. For now, it seems a bit premature, and we prefer 1.130 as a near-term target," said ING.
Yen gains after trade data
In Asia, USD/JPY traded 0.3% lower to 144.08, after data on Wednesday showed that Japan's trade balance contracted unexpectedly in April, as heightened U.S. tariffs and a stronger yen dampened export growth, while imports held up slightly better than anticipated.
USD/CNY traded 0.2% lower to 7.2083, with the yuan benefitting from dollar weakness.
China's commerce ministry on Wednesday criticized new U.S. curbs on Chinese chips, specifically opposing efforts to ban Huawei chips globally. Beijing recently warned that such moves could jeopardize the 90-day trade truce.
AUD/USD rose 0.4% to 0.6442, after falling in the previous session as the Reserve Bank of Australia cut interest rates by 25 basis points on Tuesday.
Source: Investing.com
The US dollar (USD) traded with positive sentiment for the second consecutive day on Friday (July 25th), driven by upbeat US economic data and renewed optimism about trade. On Thursday, better-than-ex...
The dollar inched off two-week lows on Friday, but kept on track for its biggest weekly drop in a month, as investors contended with U.S. tariff negotiations before an August 1 deadline, while looking...
The US Dollar Index (DXY), an index of the value of the US Dollar (USD) measured against a basket of six world currencies, trades in positive territory for the second consecutive day around 97.55 duri...
The US dollar index slipped toward 97 on Thursday, nearing a three-week low, as progress in trade talks with major partners lifted rival currencies. Reports indicated that the US and EU are moving clo...
The US dollar (USD) stabilized on Wednesday (July 23rd) after a sharp three-day decline. Traders appeared to be taking a breather as global trade tensions eased slightly after the US and Japan reached...
The S&P 500 rose 0.4% on Friday (July 25), notching its fifth consecutive record close—its longest streak in more than a year—while the Nasdaq 100 gained 0.2% after hitting an intraday high. The Dow Jones Industrial Average gained 208 points as...
Oil prices weakened on Friday (July 25th) and closed at a three-week low as traders worried about negative economic news from the US and China and signs of increasing supply. The losses were limited by optimism that a US trade deal could boost...
Gold prices weakened on Friday, weighed down by a stronger U.S. dollar and signs of progress in U.S.-EU trade negotiations, which have dampened demand for safe-haven assets. Spot gold fell 0.9% to $3,336.01 an ounce at 2:01 PM ET (18:01 GMT). U.S....
Equities in Indonesia rose 64 points, or 0.9%, to 7,555 around noon on Thursday, gaining for a second straight session and supported primarily by...
European stocks closed sharply higher on Wednesday (July 23), halting three previous trading sessions' declines, buoyed by speculation that the US...
The European Central Bank (ECB) is on track to leave its key interest rates unchanged after its July policy meeting, after having reduced rates at...
Asia-Pacific markets opened higher as the latest trade developments between the U.S. and Japan, as well as positive signs for a deal with the...