Dollar remains on the defensive amid U.S. political woes
Investing.com - The dollar edged higher against a basket of the other major currencies on Monday, but remained on the defensive as ongoing political concerns and doubts over the outlook for higher U.S. interest rates continued to weigh.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, edged up 0.11% to 93.45 by 03:35 a.m. ET (07:35 a.m. GMT), not far from Friday’s low of 93.25.
The dollar slid on Friday amid ongoing uncertainty over the economic agenda of U.S. President Donald Trump and doubts that the Federal Reserve will deliver a third rate hike this year.
The dollar surged to 14-year highs after Trump’s November election on hopes that his plans for fiscal stimulus and tax reform would bolster the economy. The dollar has since given up its post-election gains amid mounting concerns about the administration’s ability to deliver on its agenda.
Lower rates typically weigh on the dollar by making U.S. assets less attractive to yield-seeking investors.
The dollar was lower against the yen, with USD/JPY last at 108.99, after touching a four-month trough of 108.59 on Friday.
The euro was lower against the dollar, with EUR/USD slipping 0.22% to 1.1736 as investors turned their attention to the Federal Reserve's annual central banking conference in Jackson Hole, Wyoming later this week.
A speech by European Central Bank President Mario Draghi will be closely watched after the bank recently began laying the groundwork to taper its monetary stimulus program.
Fed Chair Janet Yellen is also scheduled to speak at the conference, but she is not widely expected to give new guidance on policy after the minutes of the latest Fed meeting pointed to concerns among policymakers over sluggish inflation.
The euro was lower against the yen, with EUR/JPY down 0.4% at 127.89.
The single currency dipped against sterling, with EUR/GBP last at 0.9122, not far from Friday’s 10-month peaks of 0.9148.
The euro posted its third consecutive weekly gain against sterling last week amid growing expectations that the Bank of England will keep interest rates on hold in the coming months amid concerns over the economic fallout from Brexit.
Sterling edged lower against the dollar, with GBP/USD inching down to 1.2864.
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