The U.S. dollar fell on Wednesday, extending a two-day decline against major currencies, as President Donald Trump failed to persuade dissenting Republicans to support his sweeping tax reform bill.
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Traders are also cautious amid speculation that U.S. officials may seek to weaken the dollar during the ongoing G7 finance ministers' meetings in Canada.
This week has seen a significant slowdown in developments related to Trump’s global tariff war, which has caused major currency swings in recent months. This comes even as the 90-day truce—during which tariffs on U.S. trade partners were suspended without new trade agreements—nears its end.
While markets remain optimistic that the White House is keen to restore sustainable trade flows, talks with key allies Tokyo and Seoul appear to have lost momentum. These factors have continued to put pressure on the dollar.
Analysts at the Commonwealth Bank of Australia wrote in a note, “We don’t believe the U.S. dollar, or U.S. assets more broadly, are entering a downward spiral.” However, they added, “We do expect the dollar to weaken again in 2026 as tariff-related uncertainty fades and lower interest rates support a global economic rebound.”
Analysts estimate that Trump’s tax bill could add between $3 trillion and $5 trillion to the national debt.
Mounting debt, trade disputes, and weakening investor confidence are weighing on U.S. assets.
By 05:20 GMT, the dollar had dropped 0.55% to 143.715 yen and declined 0.67% to 0.8222 Swiss francs.
The euro rose 0.42% to $1.1332, while the British pound gained 0.3% to $1.34315.
The dollar index, which measures the greenback against six major currencies, fell 0.38% to 99.59, extending a two-day slide of 1.3%.
Reuters
