US Dollar Index stays above 99.50 ahead of PMI data, voting on Trump tax cut bill
US Dollar Index receives support as the US PMI data may report growth in May’s business activity.
The US House Rules Committee approved Trump's sweeping tax-cut bill and set a full House floor vote within hours.
Fed officials noted that a decline in consumer and corporate confidence is attributed to US trade policy changes.
The US Dollar Index (DXY), which tracks the US Dollar (USD) against a basket of six major currencies, holds gains after registering losses in the previous three successive sessions. During the early European hours on Thursday, the DXY is holding its position around 99.70, slightly above two-week lows.
Furthermore, traders await S&P Global US Purchasing Managers Index (PMI) data due on Thursday. The overall business activity is expected to expand at a steady pace in May, which could provide some support for the Greenback.
The House Rules Committee approved US President Donald Trump's sweeping tax-cut bill. The US House Rules Committee stated that a full House floor vote on the Trump tax cut bill is set to take place within hours. The bill was supported by the Committee 8-4 vote after a long 22-hour session on Wednesday. Republican leaders set up two votes to begin debate and to pass the bill before sunrise on Thursday, per Reuters.
Cleveland Fed President Beth Hammack and San Francisco Fed President Mary C. Daly both voiced rising concerns about the US economy during a panel event organized by the Federal Reserve Bank of Atlanta. Although important economic indicators are still strong, both officials noted a decline in consumer and corporate confidence and partially blamed the change in opinion on US trade policies.
Moody’s downgraded the US credit rating from Aaa to Aa1 following similar downgrades by Fitch Ratings in 2023 and Standard & Poor’s in 2011. Moody’s now projects US federal debt to climb to around 134% of GDP by 2035, up from 98% in 2023, with the budget deficit expected to widen to nearly 9% of GDP. This deterioration is attributed to rising debt-servicing costs, expanding entitlement programs, and falling tax revenues.
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