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2025.05.2102:47:23UTC+00Dollar Extends Losses

The dollar index fell to approximately 99.7 on Wednesday, marking its third consecutive decline and reaching a near two-week low. This drop was driven by increasing concerns over the economic and fiscal future of the United States. The pressure on the dollar increased after President Donald Trump was unable to secure support from Republican holdouts for his comprehensive tax bill, raising doubts about fiscal stability. This development follows Moody's recent downgrade of the US sovereign credit rating due to escalating debt and a growing deficit. Furthermore, Federal officials expressed heightened concerns on Tuesday regarding the impact of the Trump administration's trade policies on the economy. St. Louis Fed President Alberto Musalem highlighted the risks to the labor market and inflation, while Cleveland Fed President Beth Hammack warned of the possibility of stagflation. Investors are now looking forward to the upcoming US-Japan bilateral meeting between Treasury Secretary Scott Bessent and Finance Minister Katsunobu Kato at this week’s G7 finance summit in Canada.

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