SINGAPORE — The US dollar languished at its weakest against the euro since September 2021 on Tuesday, as President Donald Trump’s spending bill stoked fiscal worries and uncertainty around trade deals continued to weigh on sentiment.
Investors have also started wagering on a quicker pace of monetary policy easing by the Federal Reserve this year ahead of a slew of US economic data this week, headlined by Thursday’s nonfarm payrolls report.
That spurred dollar-selling, leaving the euro perched at a near four-year high of $1.179. The single currency surged 13.8 percent in the January-June period, its strongest-ever first half performance, LSEG data showed.
Sterling was steady at $1.3737, not far from the three-and-a-half-year high it touched last week, while the Japanese yen firmed to 143.68 per dollar. The yen has gained 9 percent in the first half of the year, its strongest performance since 2016.
The dollar index, which measures the US currency against six others, slipped to 96.688, its lowest since February 2022.
Investors are grappling with uncertainty over the US Senate’s efforts to pass Trump’s tax-cut and spending bill, which faces internal party divisions over its projected $3.3 trillion addition to the national debt. The fiscal concerns have dampened sentiment and prompted some investors to diversify.
The world’s reserve currency is down more than 10 percent, its biggest first-half dive since the era of free-floating currencies began in the early 1970s.
“In 2025, the US exceptionalism narrative has been called into question. Treasury auction demand has been under pressure in recent months, and foreign investor appetite has reduced,” said Nathan Hamilton, investment analyst for fixed income at Aberdeen Investments.
