TOKYO—US fiscal concerns and a tepid auction of Treasury bonds slapped the dollar to a two-week low versus the yen on Thursday, while President Donald Trump tried to push his sweeping spending and tax-cut bill through Congress.
The lacklustre 20-year bond sale reinforced the “Sell America” narrative, weighing on not just the dollar but Wall Street as well, with traders already jittery after Moody’s cut the US triple-A credit rating last week.
Bitcoin pushed to a fresh all-time high on Thursday, partly as investors sought out alternatives to US assets. Gold also benefitted, reaching an almost two-week top of $3,325.79 and putting it within $175 of April’s record peak.
“Despite falling equities, the US dollar has not seen traditional safe-haven demand, with gold, the euro and the yen instead benefiting,” said James Kniveton, a senior corporate FX dealer at Convera.
In the process of getting Trump’s bill to the Senate, “fiscal restraint could emerge, but market sentiment suggests scepticism,” he said.
Republicans are still divided over the details of the tax legislation. Hardliners within the party continue to argue the bill does not sufficiently cut spending, House Speaker Mike Johnson said.
The bill would add $3 trillion to $5 trillion to the country’s debt, according to nonpartisan analysts.
The dollar slipped to 143.27 yen early in Asia, the weakest level since May 7.
It turned lower despite an early pop of as much as 0.5 percent after Japanese Finance Minister Katsunobu Kato said he did not talk about foreign-exchange levels in his discussions with US Treasury Secretary Scott Bessent on the sidelines of the Group of Seven meetings in Canada.
