By Ankur Banerjee

SINGAPORE (Reuters) -The U.S. dollar was soft on Friday, poised to make its first weekly drop in five weeks against the euro and the yen as worries over the United States’ worsening fiscal health sent investors scurrying for safe havens.

After Moody’s last week downgraded its U.S. debt ratings, investor attention this week has honed in on the country’s $36 trillion debt pile and U.S. President Donald Trump’s tax bill that could add trillions of dollars more to it.

Dubbed by Trump as a "big, beautiful bill", it narrowly passed Republican-controlled U.S. House of Representatives and now heads to the Senate for what is likely to be weeks of debate.

The dollar index, which compares the U.S. currency against six other units, including the yen and euro, is set for 1.1% decline this week though it was little changed at 99.829 in early Asia trade.

That’s despite a steep selloff in U.S. Treasuries at the start of the week. The 30-year bond yield stayed above 5% in Asian hours on Friday, hovering near 19 month highs. It is close to October 2023’s high of 5.179%, a break past which would take it to its highest since mid-2007.

The elevated yield hasn’t underpinned the dollar as investors flee U.S. assets in a "Sell America" move similar to last month.

"What has become quite stark this week is the reaction function in broad markets to the rise in U.S. long-end Treasury yields," said Chris Weston, head of research at Pepperstone.