The dollar is heading to end the gains of 4 weeks, amid concerns about American public finances

The dollar fell today, Friday, and is heading to register the first weekly decline in 5 weeks against a group of currencies, after concerns about the deterioration of the American public financial situation led to investors resorting to other markets.

After Moody’s last week reduced its classification of US debt, investor interest this week focused on the tax law proposed by US President Donald Trump and may add trillion dollars to government debt.

The House of Representatives has agreed hard on the draft law that Trump described as “large and beautiful”, and is now heading to the Senate, as it is likely to take weeks of discussions.

The euro rose 0.5 % to 1.1338 dollars and proceeded towards gains of 1 % during the week, after incurring losses for four consecutive weeks, as the suspension of customs duties led to the dollar’s rise in a short period in the past few weeks.

The dollar index, which measures the performance of the US currency against six main currencies, is heading to 1.35 % this week, and fell 0.3 percent to 99.614.

Anti Bravke, a currency expert at Kumretz Bank, said that while the risk of stagnation in the United States has diminished, the public financial conditions will become a greater motivation for the dollar.

“Maybe the issue will now become more urgent as it is more discussed in public. I am curious about knowing when the market will realize that this is the next main (structural) burden on the dollar,” she added.

The yen rose to 143.47 for the dollar, and heads to 1.5 % during the week, after data that showed the rise in the basic inflation in Japan in April at the fastest annual pace in more than two years, which increases the chances of raising interest again before the end of the year.

The Swiss franc increased slightly to 0.8265 for the dollar, and on its way to climb 1.2 % this week after two weeks of losses.