MARKET NEWS

By Rocky Swift

Summary

• Euro gains as Trump delays tariffs on Europe
• U.S. Senate debates tax-cut bill impacting debt
• Trump's erratic trade policies, spending plans hurt US assets
• BOJ signals readiness to keep hiking interest rates

TOKYO, May 27 (Reuters) - The dollar struggled on Tuesday to regain its footing as investor concerns over a sweeping tax and spending bill and its implications for the U.S. debt profile added to the recent erosion of confidence in American assets.
The euro gained on Monday while the United States was on holiday, after U.S. President Donald Trump delayed the imposition of tariffs on Europe. The yen was underpinned by comments from the Bank of Japan governor that kept alive chances for interest rate hikes later this year.

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Attention now turns to debate in the U.S. Senate on Trump's tax-cut bill that is expected to add to the debt pile in the world's largest economy. Markets have been sensitive to Trump's proposal, particularly after Moody's downgrade of the U.S. sovereign credit rating on May 16.

"There's a whole lot of trends going on at the moment that are militating against the dollar and also suggesting that the outlook for the globe is pretty poor," said Michael McCarthy, chief executive officer of Moomoo Australia. "Bond markets are telling us that the current economic weakness is going to get worse."