NEW YORK CITY, New York: The U.S. dollar continues to lose ground, weighed down by growing concerns over Washington's fiscal outlook and ongoing uncertainty around key trade negotiations.

Investors continue to digest the implications of President Donald Trump's proposed tax and spending legislation, which faces hurdles in the House, even within the Republican party. The sweeping bill, with an estimated cost of US$3.3 trillion, has sparked fears of a sharply rising U.S. deficit.

"You have a weak dollar due to a potentially large increase in our budget deficit, and you have continued uncertainty around these tariff deals," said Eugene Epstein, head of structuring for North America at Moneycorp in New Jersey.

Treasury Secretary Scott Bessent has added more fuel to market uncertainty, warning that tariffs could rise sharply on July 9, even for nations currently negotiating in good faith. "Any potential extensions will be up to Trump," he said. He also noted that recent adjustments to a May deal with China had resolved issues around shipments of rare earths and magnets to the U.S.

"We had this positive news from the EU for a little bit, and we had potential positive deals coming up, but then you had Trump doing a temporary about-face on Friday on Canada and so forth," Epstein said.

Amid shifting headlines—from fiscal policy and tariff battles to Middle East tensions—Epstein summed up the market mood: "It's kind of rotating a game of musical chairs… once one thing passes and the other thing is focused on."

The Bank for International Settlements recently warned that U.S. trade policies risk triggering global financial instability, reinforcing investor caution.