The euro weakened on Thursday while the yen gained ground as disappointing European business data collided with rising concerns about U.S. fiscal policy.
Investors reacted after the House passed President Trump’s tax-and-spend bill, which analysts estimate could add as much as $3.8 trillion to U.S. federal debt over the next decade. The potential increase in government borrowing intensified worries about longer-term fiscal stability.
Those concerns triggered additional selling in U.S. Treasuries and weighed on the dollar, prompting market participants to seek refuge in traditional safe-haven currencies and assets. The shift reflected heightened demand for stability amid uncertainty about the outlook for U.S. public finances.
At the same time, Bitcoin jumped to a new record above $111,000 as some investors looked for alternatives to conventional financial markets. The cryptocurrency’s surge was interpreted by some market participants as a hedge against perceived fiscal risk and currency weakness.
Overall, Thursday’s market moves highlighted a broader reallocation of capital: weaker European economic indicators undermined the euro, while U.S. fiscal developments and reduced confidence in Treasury markets supported the yen and drove interest in alternative assets. Traders will be watching upcoming economic releases and political developments closely for signs of whether these trends will continue.