NEW YORK, May 22 (Reuters) – The U.S. dollar advanced on Thursday after three days of losses, lifted partly by the passage of President Donald Trump’s bill for huge tax and spending cuts by the House of Representatives, as the euro stumbled following data painting a bleak economic picture for the euro zone.
Bitcoin , meanwhile, pushed to a new all-time high, as investors sought out alternatives to U.S. assets.
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Trump’s sweeping tax bill has been the market’s focus and its passage has been met partly with relief and partly with caution. The bill is set to add to the country’s ballooning debt pile. The market is now looking at weeks of debate on it in the Republican-led Senate.
The non-partisan Congressional Budget Office estimates the bill will add $3.8 trillion to the $36.2 trillion in U.S. debt over the next decade.
In afternoon trading, the dollar edged up 0.1% to 143.75 yen after earlier dropping to 142.80 yen, its weakest level since May 7.
The euro fell 0.3% against the dollar to $1.1293, after rising on Wednesday for a third straight session. Euro zone business activity unexpectedly contracted this month, HCOB’s preliminary composite Purchasing Managers’ Index showed on Thursday.
In contrast, U.S. business activity picked up in May due in part to the truce in the trade war between Washington and China. S&P Global’s flash U.S. Composite PMI Output Index, which tracks the manufacturing and services sectors, increased to 52.1 this month from 50.6 in April. A reading above 50 indicates expansion in the private sector.
Erik Bregar, director, FX & precious metals risk management, at Silver Gold Bull in Toronto, said the dollar got a moderate push higher from the passage of the tax bill, but the greenback was already rallying when the legislation got the U.S. House green light amid the soft European PMI.
“Today feels like a bit of a reversal of yesterday’s de-dollarization trade. The stronger-than-expected U.S. PMIs helped unwind some of that de-dollarization trade,” he added.