EUR/USD Rises as US Dollar Faces Pressure from Credit Downgrade and Trump’s Tax Bill Struggles

EUR/USD Strengthens as US Credit Rating Downgrade and Tax Bill Struggles Weigh on Dollar

EUR/USD has strengthened, rising to 1.1350 as the US Dollar continues to face pressure following Moody’s downgrade of the US credit rating. The downgrade to Aaa from Aa1, prompted by concerns over fiscal imbalances and growing interest rate burdens, has fueled skepticism about the US Dollar’s stability.

Additionally, the Euro benefits from news of US President Donald Trump’s struggles to rally support for his proposed tax bill. Despite efforts, Trump could not persuade Republican lawmakers to back his $3 trillion-$5 trillion tax package, further destabilizing confidence in the US economy.

The US Dollar Index (DXY) showed signs of recovery, but it remains 0.3% lower at around 99.70, weighed down by ongoing fiscal concerns. Meanwhile, global markets are also closely watching developments in Russia-Ukraine ceasefire negotiations, which add to the geopolitical dynamics impacting currency movements.

With the US facing mounting fiscal issues, including a growing national debt of $36 trillion, the Euro has found support, further pushing EUR/USD upwards.