Asian session review: US dollar has stabilized against major currencies

During today's Asian trading, the US dollar consolidated against major currencies after falling significantly the day before. 

The US Dollar Currency Index (DXY), which tracks the dynamics of the dollar against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona) rose by 0.06% to 99.67.

U.S. fiscal concerns and weak demand for Treasury bonds pushed the dollar to a two-week low against the yen. Meanwhile, Congress edged closer to approving President Trump’s sweeping tax and spending cuts. A lackluster 20-year bond auction added to worries, reinforcing the “Sell America” sentiment that also pressured Wall Street. Traders remain uneasy after Moody’s downgraded the U.S. credit rating last week. Despite falling equities, the dollar hasn’t attracted safe-haven flows - gold, the euro, and the yen have benefited instead. While Trump’s bill may bring fiscal restraint, market sentiment remains skeptical. The bill cleared a key committee in the House on Wednesday, setting up a floor vote. Passage would send the legislation to the Republican-controlled Senate, where debate is expected to stretch for weeks. The Congressional Budget Office estimates the bill could add $3.8 trillion to the national debt over the next decade.

The dollar fell 0.3% against the yen, to 143.23 yen, the weakest since May 7. Earlier gains from comments by Japanese Finance Minister Kato - who said FX levels weren’t discussed with the U.S. - were quickly reversed, suggesting ongoing concerns that the U.S. favors a weaker dollar.

South Korea’s won jumped on Wednesday to its strongest since November after reports Washington urged Seoul to strengthen the currency, though it retreated slightly on Thursday.