The euro edged lower on Thursday after disappointing economic data signaled worsening conditions in the eurozone.
Meanwhile, the U.S. dollar remained under pressure, trading near a two-week low against the yen due to mounting concerns over the country’s rising debt.
President Donald Trump’s controversial tax and spending bill, which narrowly passed the House of Representatives, raised fresh fears about the U.S. fiscal outlook.
The Congressional Budget Office estimates the plan could add nearly $3.8 trillion to the current $36.2 trillion U.S. debt over the next decade.
Francesco Pesole, an FX strategist at ING, warned, “Trump is playing with fire with this deficit. The result is a coordinated sell-off in equities and Treasuries, reinforcing the ‘Sell America’ sentiment.”
Bond Market Weakness Adds Pressure on the Dollar
The fallout from Wednesday’s poor 20-year bond auction continued, pushing the dollar down as investors grew more cautious.
The greenback fell as much as 0.5% to 142.80 yen—its weakest since early May—before recovering slightly to 143.655.
According to Sara Midtgaard of Nordea, “The bond market could be the main trigger for further dollar weakness, especially as demand for U.S. government bonds remains weak.”
The euro also slipped 0.3% to $1.1293 after three consecutive days of gains.
The decline came after eurozone zone business activity unexpectedly contracted in May, according to the HCOB Purchasing Managers’ Index.
Analysts cited the lingering effects of Trump-era tariffs and a lack of progress on trade deals as key headwinds.
Elsewhere, the British pound held steady at $1.3414, staying close to a three-year high thanks to hotter-than-expected inflation, which has reduced chances of interest rate cuts by the Bank of England.
Bitcoin Breaks Records as Investors Seek Alternatives
As traditional markets wavered, Bitcoin surged to a fresh all-time high of $111,862.98—up 3.3% from the previous session.
Analysts attribute the rally to increasing hopes for stablecoin regulation and growing investor interest in alternatives to dollar-based assets.
Jim Reid of Deutsche Bank noted, “Bitcoin’s rise is being supported by both regulatory optimism and growing concern over U.S. debt instability.”
