Investing.com - The dollar weakened further as U.S. President Donald Trump on late Monday in the U.S. fired acting U.S. Attorney General Sally Yates after she ordered Justice Department lawyers not to enforce Trump's immigration ban, the White House spokesman said on Twitter.
Trump has named Dana Boente, U.S. attorney for the Eastern District of Virginia, to replace Yates, White House spokesman Sean Spicer said in a tweet.
USD/JPY changed hands at 113.61, down 0.14%, while AUD/USD traded at 0.7564, up 0.12% and GBP/USD at 1.2506, up 0.16%.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell 0.07% to 100.35. Ahead the Bank of Japan details its latest monetary policy views on Tuesday in Asia with investors also eyeing a Fed review statement on Wednesday.
Earlier, Japanese household spending fell 0.3% in December from a year earlier, less than the median estimate of a 0.6% declines. Meanwhile, seasonally adjusted jobless rate was flat at 3.1% in December, in line with a Reuters estimate. In Australia, the NAB business confidence index for December came in at plus-^, above the previous month at plus-5, while the NAB business survey reached plus-11, from plus-5. Private sector credit in Australia rose 0.7%, more than the 0.5% gain seen in December month-on-month.
Overnight, the dollar dropped in U.S. trade on Monday with concerns over a travel ban to the U.S. for seven predominantly Muslim countries leading to a move to safe-haven plays such as the Japanese yen and as expectations grow for the Fed to issue cautious language in its latest policy statement on Wednesday.
In earlier trade, the dollar fell more than 1% against the safe haven yen on Monday as the travel ban put in place by Trump added to concerns over the potential economic ramifications of the new administration's policies.
Trump signed an executive order on Friday that curbed immigration from seven predominantly Muslim countries, adding to questions over the destabilizing impact of the new administration's protectionist policies. The order triggered legal challenges, international criticism, widespread protests and confusion over its implementation at airports.
Sentiment on the greenback was also hit after data on Friday showing a sharp slowdown in U.S. fourth quarter growth prompted speculation that the Federal Reserve will avoid hiking interest rates too quickly.
The Fed, which is to hold its next policy meeting on Wednesday, isn’t expected to raise interest rates, but investors are keen to hear how it views the economic outlook and the future path of interest rates.
Data on Monday showed that U.S. consumer spending increased in December, rising 0.5% after a 0.2% increase in November. Personal income rose 0.3% last month after edging up 0.1% in November.
A separate report showed that U.S. pending home sales rose by 1.6% in December, ahead of forecasts for a 1.1% increase.