{"id":56330,"date":"2025-05-23T16:26:23","date_gmt":"2025-05-23T16:26:23","guid":{"rendered":"https:\/\/prosfunds.com\/?p=56330"},"modified":"2025-05-23T16:26:27","modified_gmt":"2025-05-23T16:26:27","slug":"us-debt-fears-put-dollar-on-track-for-worst-week-since-tariffs-sell-off","status":"publish","type":"post","link":"https:\/\/prosfunds.com\/?p=56330","title":{"rendered":"US debt fears put dollar on track for worst week since tariffs sell-off"},"content":{"rendered":"<div>\n<p>Unlock the Editor\u2019s Digest for free<\/p>\n<p class=\"article__content-sign-up-topic-description o3-type-body-base\"><span>Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.<\/span><\/p>\n<p><iframe class=\"article__content-sign-up-iframe close\" scrolling=\"no\" id=\"signUpIframe\" data-prev-url=\"\/register\/in-article-sign-up?ft-content-uuid=04deb2ec-5bb1-4c7c-94bb-6f62582a0032\"><\/iframe><\/div>\n<div id=\"article-body\">\n<p>Investor jitters about the state of the US public finances have put the dollar on track for its worst week since President Donald Trump\u2019s \u201cliberation day\u201d tariffs announcement rocked markets at the beginning of April. <\/p>\n<p>The US currency fell 0.7 per cent on Friday against a basket of peers including the euro and the yen. The move took its decline for the week to 1.8 per cent, the biggest drop for six weeks, as Trump\u2019s tax bill added to fears over rising US debt levels. That has come as some investors question whether to reduce their huge overweight positions in dollar assets, on concerns about erratic policymaking and the president\u2019s trade war.<\/p>\n<p>\u201cLingering fears over the quality of US asset markets and the threat of de-dollarisation are continuing to weigh on the dollar,\u201d said Chris Turner, global head of markets research at ING. <\/p>\n<p>He cited recent data indicating outflows from US assets, as well as a statement from G7 finance ministers on Thursday that mentioned \u201cunsustainable global macro imbalances\u201d. <\/p>\n<p>That \u201clooked a clear reference to the large Asian trade surpluses with the US\u201d, said Turner.<\/p>\n<figure class=\"n-content-image n-content-image--full\" data-component=\"image-set\"><picture><source media=\"(min-width: 700px)\"  width=\"3500\" height=\"2500\"><\/source><source media=\"(max-width: 490px)\"  width=\"1500\" height=\"2000\"><\/source><\/picture><\/figure>\n<p>Bets that some Asian countries might make trade agreements with the US that include measures to strengthen their foreign exchange rates against the greenback have supported a string of currencies including the Korean won and Taiwanese dollar in recent weeks.<\/p>\n<p>\u201cRenewed investor concerns over the US fiscal outlook, alongside speculation that the Trump administration is seeking to weaken the dollar in discussions with other countries, have contributed to the sell-off,\u201d said Lee Hardman, senior currency analyst at banking group MUFG.<\/p>\n<p>Investor anxiety that Trump\u2019s tax-cutting bill could worsen the US deficit has fuelled a sell-off in long-term US debt this week, dragging other markets lower. <\/p>\n<p>That has pushed the 30-year Treasury yield up 0.13 percentage points this week above 5 per cent. <\/p>\n<p>\u201cInvestors\u2019 concern over the escalating US fiscal burden is slowly building,\u201d said analysts at BBH.<\/p>\n<p>The dollar has slid this year as investors have grown concerned about the impact of Trump\u2019s sweeping tariffs on the US economy. That has included periods of falling at the same time as US government bonds and stocks are dropping, which has been taken as a sign of investors shedding dollar assets. Typically, higher yields increase the attractiveness of dollar assets.<\/p>\n<p>\u201cThe thing that\u2019s most troubling is how the dollar is reacting to high US rates,\u201d said Michael Metcalfe, head of macro strategy at State Street Global Advisors. <\/p>\n<p>\u201cWhen currencies and bond prices move in the same direction, that\u2019s reflecting a dent in policy sustainability,\u201d he added, saying the break in usual correlations \u201cmakes you think there is something more structural at play\u201d.<\/p>\n<p>Analysts at RBC BlueBay Asset Management said they expected the dollar weakening to continue as investors look to hedge their exposure to the greenback in the short term and rethink a \u201cstructural overallocation\u201d to the US in the longer term. <\/p>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.ft.com\/content\/04deb2ec-5bb1-4c7c-94bb-6f62582a0032\" target=\"_blank\" rel=\"noopener\" rel=\"nofollow\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Unlock the Editor\u2019s Digest for free Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter. Investor jitters about the state of the US public finances have put the dollar on track for its worst week since President Donald Trump\u2019s \u201cliberation day\u201d tariffs announcement rocked markets at the beginning of April. [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":56331,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[23],"tags":[],"class_list":{"0":"post-56330","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>US debt fears put dollar on track for worst week since tariffs sell-off | Prosfunds<\/title>\n<meta name=\"description\" content=\"Unlock the Editor\u2019s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Investor jitters about the\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/prosfunds.com\/?p=56330\" 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