Dollar tumbles on fiscal worries as Bitcoin extends record rally, surging past US$110,000
US fiscal concerns hit dollar, yen strengthens
Bitcoin reaches record high as investors seek dollar alternatives
Republicans divided over Trump's spending and tax-cut bill
TOKYO, May 22 — US fiscal concerns and a tepid auction of Treasury bonds slapped the dollar to a two-week low versus the yen today, 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 today, partly as investors sought out alternatives to US assets. Gold also benefitted, reaching an almost two-week top of US$3,325.79 (RM14,160) and putting it within US$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 US$3 trillion to US$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 per cent 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.
However, the short-lived response suggests investor suspicions run deep that the White House wants a weaker dollar versus many Asian currencies.
South Korea's currency jumped to the strongest level since November 4 yesterday at 1,368.90 per dollar after the Korea Economic Daily reported that Washington had demanded that Seoul come up with measures to boost the won. It was trading a touch weaker at 1,377.00 today.
The euro was last flat at US$1.1330, after rising 0.4 per cent on Wednesday for a third straight session of gains.
Sterling was steady at US$1.3426.
The Swiss franc ticked up 0.1 per cent to 0.8245 per dollar.
Bitcoin was last 1.6 per cent higher at US$110,049.82, after earlier reaching a record high of US$110,636.58. — Reuters
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