Dollar Weakens Amidst Fiscal Worries Over $40 Trillion Debt Ceiling
The US dollar experienced a decline against major currencies during the week of August 21, primarily due to fresh fiscal worries triggered by the US debt surpassing $40 trillion.
This decline was evident in the Dollar Index, which measures the dollar's strength against a basket of six currencies. The index dropped nearly 1% on a weekly basis, closing at 98.80, down from its previous week's high of 99.67.
The weakness of the US dollar led to gains in other major currencies. The EUR/USD pair surged by 0.94%, reaching a high of 1.1712 and eventually closing at 1.1679. Similarly, the GBP/USD pair rallied by 0.73% against the greenback.
The decline in the US dollar can be attributed to various factors, including concerns about inflation, geopolitical tensions in the Middle East, and the growing public debt in the US.