US Dollar Index rises toward 99.50 as continues recovery from five-week lows

• US Dollar Index rebounds from Monday's five-week low of 98.70.
• The Greenback appreciates as 10- and 30-year US Treasury yields are trading lower at 4.46% and 4.97%, respectively.
• President Trump's "One Big Beautiful Bill" is on the way to the Senate floor for Voting.

The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against six major currencies, is continuing its recovery from a five-week low of 98.70, recorded in the previous session. On Tuesday, the DXY is trading around 99.30 during the European hours.

The Greenback receives support as the long-term US yields continue to decline for the third consecutive day, with 10- and 30-year yields on US Treasury bonds standing at 4.46% and 4.97%, respectively, at the time of writing.

The US Dollar faced challenges as the domestic markets returned to 'Sell America' after Moody's downgraded the US credit rating from Aaa to Aa1, similar downgrades by Fitch Ratings in 2023 and Standard & Poor's in 2011. Moody's lowered its United States' credit rating for the first time since 1917, citing surging debt levels and Washington's persistent gridlock over budget deficit solutions.

US President Donald Trump's "One Big Beautiful Bill" is set to be voted on in the Senate. The Bill is expected to raise the deficit by $3.8 billion, according to the Congressional Budget Office (CBO). The Bill's provisions, including tax cuts, spending increases, along raising the debt ceiling, could worsen US government finances and increase the risk of bond yields staying higher for longer. Higher bond yields can keep borrowing costs higher for consumers, businesses, and governments.

Traders will likely observe the Durable Goods Orders, the Dallas Fed Manufacturing Index, and the Conference Board's Consumer Confidence report due later in the North American session. Later this week, the release of the latest FOMC Minutes on Wednesday and the PCE inflation data on Friday will be eyed, seeking fresh impetus for the Federal Reserve's (Fed) interest rate outlook.