Dollar Slips as U.S. Fiscal Concerns Deepen After Trump Tax Bill Approval

Dollar Slips as U.S. Fiscal Concerns Deepen After Trump Tax Bill Approval

The U.S. Dollar edged lower on Friday as concerns about the growing U.S. government debt lingered following the House of Representatives’ approval of President Trump’s tax and spending bill on Thursday. The bill permanently extends tax cuts introduced by Trump, but questions remain about how the government will fund this increased spending, potentially swelling the budget deficit further.

According to Antje Praefcke, currency analyst at Commerzbank, the market has yet to fully grasp the long-term impact this fiscal policy will have on the dollar. "I look forward to seeing when the market catches on to the fact that this is the next big structural drain on the dollar," she said.

The U.S. Dollar Index (DXY) declined 0.3% to 99.6710 amid ongoing uncertainty over the country’s fiscal outlook.

Investors are closely watching how the increased government spending might affect the broader economy and the dollar’s strength in the coming months.