Investing.com - The U.S. dollar was wallowing 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 eased back from almost 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 07.33 a.m. ET (11.33 a.m. GMT) after touching 93.65 overnight, its lowest since June 22, 2016.
The dollar remained on the defensive 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 late last week that the investigation into alleged links between President Donald Trump’s campaign and Russia in last year’s election is extending into his business.
Political developments remained in the spotlight on Monday following reports that President Trump was set make a statement on health care at 3:15 p.m. ET.
An attempt by Republican lawmakers to replace Obamacare collapsed last week, delivering a major policy blow to the Trump administration.
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.
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 a touch lower against the dollar, with EUR/USD slipping to 1.1645, 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 high 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 down 0.28% to 110.79.
Sterling pushed higher against the greenback, with GBP/USD rising 0.33% to 1.3037.
The Australian dollar gained ground, with AUD/USD rising 0.4% to 0.7947, holding below the 26-month high of 0.7992 set on Friday.