U.S. Dollar Extends Fall As Trump's Tax Bill And Tariffs Weigh

(RTTNews) - The U.S. dollar continued to trade lower against other major currencies in the Asian session on Tuesday, as markets anticipated a vote on U.S. President Donald Trump's historic tax and spending bill.

Traders' sentiment was dampened by a protracted Senate debate over a package that would have increased the U.S. debt load by an estimated $3.3 trillion.

A vote on Trump's massive tax-cut and spending plan was anticipated; but the argument continued over a lengthy set of changes proposed by Republicans and the minority Democrats.

Before the July 4 Independence Day celebration, Trump wants the law to be passed. Investors are also waiting for important U.S. labor market data on Thursday as international trade negotiators rush to reach agreements before Trump's tariff deadlines.

Asian stock markets traded higher amid ongoing optimism about trade deals ahead of the impending deadline for U.S. reciprocal tariffs early next month. Market sentiment also improved as the truce in the 12-day war between Israel and Iran continued to hold without violations from either side.

The cooling tensions in the Middle East as well as favorable US inflation and US consumer sentiment reports also fueled hopes for interest rate cuts by the US Fed.

In the Asian trading today, the U.S. dollar fell to more than a 10-year low of 0.7915 against the Swiss franc and nearly a 4-year low of 1.1807 against the euro, from yesterday's closing quotes of 0.7929 and 1.1786, respectively. If the greenback extends its downtrend, it is likely to find support around 0.77 against the franc and 1.19 against the euro.

Against the yen, the pound and the NZ dollar, the greenback dropped to nearly a 3-week low of 143.44, 1.3749 and 0.6102 from Monday's closing quotes of 143.81, 1.3731 and 0.6091, respectively. The greenback may test support near 141.00 against the yen, 1.39 against the pound and 0.63 against the kiwi.

Against the Australia and the Canadian dollars, the greenback edged down to 0.6581 and 1.3603 from early highs of 0.6554 and 1.3619, respectively. On the downside, 0.67 against the aussie and 1.34 against the loonie are seen as the next support levels for the greenback.

Looking ahead, manufacturing PMI reports for June from various European economies and U.K., Eurozone flash CPI for June are slated for release in the European session.

In the New York, U.S. Redbook report, U.S. S&P Global manufacturing PMI for June, U.S. construction spending for May, U.S. ISM manufacturing new orders for June and U.S. Dallas Fed services index for June are set to be published.