EUR/USD gains as heightened concerns over US fiscal health hurt the US Dollar
The post EUR/USD gains as heightened concerns over US fiscal health hurt the US Dollar appeared on BitcoinEthereumNews.com.
EUR/USD jumps to near 1.1350 due to weakness in the US Dollar as concerns over US fiscal imbalances persist. US President Trump’s new tax bill is expected to increase the nation’s debt by $3.8 trillion over a decade. The uncertainty over a EU-US trade deal escalates as the old continent has not offered unilateral concessions. EUR/USD resumes its upside journey on Friday after a corrective move the previous day. The major currency pair jumps to near 1.1350 during European trading hours as the US Dollar (USD) slumps after a short-lived recovery on Thursday. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, declines to near the two-week low around 99.40. Financial market participants continue to dump the US Dollar as the new tax bill by United States (US) President Donald Trump has increased concerns over the nation’s fiscal health. The new bill comprises tax cuts and higher spending on defense and immigration controls, among others, and it is expected to increase the national debt by $3.8 trillion over the next decade, according to the nonpartisan Congressional Budget Office. Investors are worried that the additional burden on the nation’s debt could lead to further erosion of the US credit rating. Last week, Moody’s downgraded the US sovereign credit rating by one notch to Aa1 from Aaa, citing the failure of successive administrations and Congress to agree on measures to “reverse the trend of large annual fiscal deficits and growing interest costs”. The scenario of a long-term issuer rating downgrade could lead to an increase in borrowing rates for the government, which limits the spending capacity for future generations or makes borrowing more expensive for them. The imposition of Trump’s new bill is also expected to accelerate consumer inflation expectations, assuming that tax cuts for households result…
Filed under: News - @ May 23, 2025 10:24 am