1 July | Dollar

Dollar hits 4-year low against euro amid US budget deficit concerns

Dollar hits 4-year low against euro amid US budget deficit concerns

On Monday, the dollar fell to a nearly four-year low against the euro amid concerns over growing US budget deficit and uncertainty surrounding trade deals with other countries, Reuters reports.

Despite sharp internal divisions over the risks of adding $3.3 trillion to the national debt, Senate Republicans continue pushing for the passage of Donald Trump’s sweeping tax-cut bill. This is further weighing on the dollar.

Meanwhile, the European Union has expressed willingness to negotiate a trade deal with the US that would impose a 10% tariff on most goods exported from the region to America, says Reuters. The bloc is also rolling out major investment programs. As a result, the euro has surged to 1.1780 against the dollar, its highest since September 2021.

Trade policy instability continues weighing on the dollar. US Treasury Secretary Scott Bessent announced new tariff hikes targeting several countries effective July 9, even as these nations remain engaged in trade negotiations. This policy uncertainty is fueling increased volatility in currency markets.

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