Bank of America (BofA) Securities reports that discussions of potential currency agreements have become a key market focus. Meanwhile, US fiscal policy no longer provides the same level of support for the dollar.
While G7 finance ministers hold their meeting, speculation is growing about possible joint exchange-rate statements. BofA Securities notes the dialogue has shifted from broad concepts like the "Mar-a-Lago Accord" to bilateral talks.
Reaching substantive currency agreements among major developed nations remains highly unlikely, BofA analysts emphasize. But even preliminary discussions have exacerbated the dollar’s decline.
Separately, Congressional debates over President Trump’s tax and spending plans are heightening concerns about rising US debt. As Investing reports, these worries are pushing long-term Treasury yields higher.