The U.S. dollar was nursing losses near 13-month lows against a basket of the other major currencies on Monday, pressured lower by ongoing concerns over political turmoil in Washington, while the euro was steady near two-year highs.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was at 93.80 by 02.42 a.m. ET (06.43 a.m. GMT) after touching 93.65, its lowest since June 22, 2016.
The dollar remained on the back foot after White House spokesman Sean Spicer resigned on Friday, underlining concerns over the upheaval in the Trump administration.
The dollar had already come under pressure following reports that the investigation into alleged links between President Donald Trump’s campaign and Russia in last year’s election is extending into his business.
The political uncertainty also dampened hopes for the passage of Trump’s legislative efforts, such as overhauling the tax code and implementing fiscal stimulus.
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 fed into dollar weakness.
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 steady against the dollar, with EUR/USD at 1.1656, after touching a 23-month high of 1.1684 earlier.
The euro was underpinned by expectations that the European Central Bank is moving closer to tapering its bond-buying program.
The dollar slid to five-week lows against the yen, with USD/JPY down 0.2% to 110.9.
Sterling inched higher against the greenback, with GBP/USD last at 1.3005.
The Australian dollar gained ground, with AUD/USD rising 0.37% to 0.7943, holding below the 26-month high of 0.7992 set on Friday.
Meanwhile, the New Zealand dollar slipped lower, with NZD/USD down 0.31% to 0.7433, off Friday’s 10-month highs of 0.7457.