Dollar Heads for Worst Week in Nearly Three Months Amid Fiscal Skepticism

The US dollar is on track for a nearly 1% weekly drop as investors lose confidence in Washington's fiscal outlook, despite an attempt by the U.S. Department of the Treasury to calm credit desks.

The greenback slipped 0.2% to trade near 98.74, its lowest level in three months, as yields on U.S. Treasuries resumed their upward march, with the 10-year yield climbing back to 4.70% and the 30-year yield hovering near 5.25%.

According to Daniela Hathorn, senior market analyst at Capital.com, 'The move is reflecting a repricing of the term premium, as investors demand greater compensation for absorbing heavy government borrowing, fiscal uncertainty and growing competition for capital from AI-related corporate issuance.'