Dollar Weakens Amid U.S. Fiscal Concerns as Bitcoin Hits Record High

The U.S. dollar slipped to a two-week low against the yen on Thursday, pressured by rising fiscal concerns and a weak 20-year Treasury bond auction. The sale underscored growing investor skepticism over U.S. financial stability, especially following last week’s credit rating downgrade by Moody’s.

Market jitters intensified as President Donald Trump pushed forward his ambitious spending and tax-cut bill, which analysts warn could add $3 trillion to $5 trillion to the national debt. Republican lawmakers remain divided, with some criticizing the bill for not doing enough to curb spending.

The dollar fell to 143.27 yen, its lowest since May 7, despite an early boost after Japanese Finance Minister Katsunobu Kato’s comments downplaying foreign exchange discussions with U.S. officials. The brief rally faded, highlighting persistent concerns that the White House may favor a weaker dollar, particularly against Asian currencies.

The euro remained stable at $1.1330 after three consecutive days of gains. The British pound held firm at $1.3426, while the Swiss franc inched up 0.1% to 0.8245 per dollar. South Korea’s won surged to 1,368.90 per dollar, its strongest since November, before slightly weakening to 1,377.00, amid reports of U.S. pressure to support the currency.

As traditional safe havens like the dollar lost appeal, investors turned to gold and cryptocurrencies. Gold rose to $3,325.79, nearing its April record, while Bitcoin surged 1.6% to $110,049.82 after hitting an all-time high of $110,636.58. According to Convera’s James Kniveton, safe-haven demand has shifted toward gold, the yen, and the euro, reflecting waning confidence in U.S. fiscal policies.