USD faces deficit pressure as EUR/USD gains on global growth momentum

The US dollar is facing headwinds from mounting budget deficit concerns, constraining its typical safe-haven appeal while EUR/USD benefits from improving global growth momentum. Fiscal sustainability questions are weighing on dollar sentiment as deficit projections expand, creating structural pressure on the greenback. Meanwhile, the euro draws support from synchronized global recovery signs, particularly in manufacturing sectors across Europe and Asia. GBP/USD remains under pressure from UK-specific challenges, while USD/JPY reflects the complex interplay between US fiscal concerns and Bank of Japan policy normalization. AUD/USD shows resilience backed by commodity strength and China's recovery. Technical indicators suggest EUR/USD building momentum above 1.0800 with potential for further gains if US deficit concerns intensify. Traders are increasingly factoring long-term fiscal dynamics into currency valuations alongside traditional monetary policy considerations.