U.S. Dollar Falls Amid Growing U.S. Debt Concerns

(RTTNews) - The U.S. dollar weakened against other major currencies in the European session on Friday, amid concerns about the fiscal impact of the U.S. Republican tax cut bill.

The U.S. House of Representatives passed a controversial bill that could add trillions to the federal government's already massive debt and widen the deficit at a time when the economy is facing the risk of stagflation due to tariff uncertainty.

U.S. Treasury yields eased on improved U.S. data and comments from a U.S. Fed official that he still sees a path to interest rate cuts later this year.

In the European session today, the U.S. dollar fell to more than a 3-year low of 1.3489 against the pound, from an early high of 1.3419. The greenback may test support near the 1.36 region.

In economic news, the data from the Office for National Statistics showed that U.K. retail sales rebounded more than expected in April as good weather boosted food store sales. Retail sales grew 1.2 percent on a monthly basis in April, following a revised 0.1 percent rise in March. Sales were expected to climb only 0.3 percent.

A monthly survey today showed that British consumer confidence strengthened in May on hopes of easing trade tensions and the interest rate reduction by the Bank of England. The GfK consumer confidence index rose to -20 in May from -23 in April, survey results showed Friday. All five key indicators improved in May, led by two forward-looking findings.

The greenback slipped to more than a 2-week low of 1.3809 against the Canadian dollar, from an early high of 1.3859. On the downside, 1.36 is seen as the next support level for the greenback.

Against the yen, the euro and the Swiss franc, the greenback edged down to 143.24, 1.1345 and 0.8255 from early highs of 144.02, 1.1279 and 0.8289, respectively. If the greenback extends its downtrend, it is likely to find support around 141.00 against the yen, 1.14 against the euro and 0.81 against the franc.

Looking ahead, Canada retail sales data for April, U.S. existing home sales data for March and U.S. Baker Hughes oil rig count data are slated for release in the New York session.