The US Dollar weakened against major currencies on Friday, following the final approval of President Donald Trump’s landmark tax cut legislation and growing pressure on countries to strike trade agreements with the US.
While the Dollar had strengthened on Thursday due to unexpectedly strong US employment data, which delayed expectations of Federal Reserve rate cuts, the Dollar index is still on track for a second consecutive weekly drop.
The Republican-led House of Representatives narrowly approved President Trump’s sweeping spending and tax cut package, dubbed his “One, Big, Beautiful Bill,” which is projected to add $3.4 trillion to the nation’s $36.2 trillion debt. Trump is expected to sign it into law on Friday, Reuters reports.
With US markets closed for Independence Day, focus now shifts to the July 9 deadline set by President Trump, when broad tariffs are scheduled to take effect on countries such as Japan that have yet to finalise trade deals with the United States.
“The appetite for the Dollar is waning because, one, the US debt worries are rising and appetite for US debt is at risk,” stated Ipek Ozkardeskaya, senior market analyst at Swissquote Bank.
“And also because of the fact that the tariff situation and trade disruptions are going to have a negative impact on growth for the US and the Fed will not necessarily be able to support the economy when inflation risks are rising.”
The Dollar index recorded its weakest first-half performance since 1973, as President Trump’s turbulent implementation of broad tariffs fuelled fears over the US economy and the stability of Treasury markets.
Earlier in the week, the greenback fell to its lowest levels in over three years against both the Euro and the British Pound.
On Friday, the Dollar index slipped 0.1% to 96.96, slightly paring Thursday’s 0.4% gain. Meanwhile, the Euro rose 0.1% to $1.1773, setting up a 0.4% gain for the week.
In addition, the Yen rose 0.4% to 144.375 against the Dollar, while the Swiss Franc strengthened 0.2%, reaching 0.7939 per Dollar.