U.S. dollar wallows near 13-month lows

© Reuters. U.S. dollar wallows near 13-month lows

Investing.com - The U.S. dollar was nursing losses near 13-month lows against a currency basket on Monday, as sentiment on the greenback remained negative amid political uncertainty in Washington.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was at 93.84 by 10.47 a.m. ET (02.47 p.m. GMT) after touching 93.65 overnight, its lowest since June 22, 2016.

Worries over policy direction from the White House and Capitol Hill since last week’s failed attempt to overhaul healthcare and investigations into alleged links between President Donald Trump’s campaign and Russia in last year’s election have fed into dollar weakness.

The failure to pass healthcare reform has dampened hopes for the passage of Trump’s other legislative efforts, such as overhauling the tax code and implementing fiscal stimulus.

Political developments remained in the spotlight on Monday following reports that Trump was set make a statement on health care at 3:15 p.m. ET.

Hopes for tax reforms and fiscal stimulus under the Trump administration helped drive the dollar to a 14-year high after the November election. The dollar has now given up all of its post-election gains.

Doubts over the Federal Reserve’s plans for a third rate hike this year have also pressured the dollar lower.

The Fed is to hold its next meeting on Wednesday and is widely expected to hold policy steady. Officials may also give some insight into its plans to start normalizing its balance sheet.

The euro was slightly lower against the dollar, with EUR/USD slipping to 1.1638, after touching a 23-month high of 1.1684 earlier.

Demand for the euro was underpinned by expectations that the European Central Bank is moving closer to tapering its bond-buying program.

The euro came off the day’s highs after data pointing to a slowdown in euro area private sector growth at the start of the second half of 2017.

The dollar slid to five-week lows against the yen, with USD/JPY falling to 110.62. it was last at 111.00.

Sterling pushed higher against the greenback, with GBP/USD rising 0.25% to 1.3025.

The Canadian dollar hit fresh 14-month highs, with USD/CAD falling 0.3% to 1.2501.

The loonie was boosted by official data showing that Canadian wholesale trade rose more than expected in May and higher prices for oil, a major Canadian export.