Investing.com - The dollar was nursing losses on Tuesday, a day after falling to multi-month lows against a currency basket on the back of deepening doubts over the Trump administration’s ability to push through its economic agenda.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was steady at 99.09. The index plumbed 98.67 on Monday, its lowest trough since November 11.
The dollar came under heavy selling pressure as the failure of U.S. Republicans to get enough support for their own bill to overhaul healthcare rattled investors.
The setback for the White House added to skepticism over the Trump administration’s ability to work with Congress to deliver on the president’s pro-growth economic agenda, including tax cuts and infrastructure spending.
The dollar index had surged to almost 14-year highs in early January propelled higher by expectations for a strong economic recovery and higher inflation, the so-called ‘Trump Trade’.
But the dollar found some support after remarks by Federal Reserve officials shifted investor focus back to the prospect of more interest rate hikes.
The dollar was lower against the safe haven yen, with USD/JPY down 0.2% to 110.43 after falling as low as 110.10 on Monday, the weakest level since November 18.
The euro was a touch lower, with EUR/USD dipping 0.13% to 1.0849 after rising to peaks of 1.0905 in the previous session, the most since November 11.
Sterling pulled back from one-month highs, with GBP/USD dipping to 1.2548 as markets braced for British Prime Minister Theresa May to trigger Article 50 of the Lisbon Treaty on Wednesday, formally beginning the two year process of exiting the European Union.
The pound was steady against the euro, with EUR/GBP at 0.8647.
Elsewhere, the South African rand was sharply lower against the dollar for a second day amid rumors that Finance Minister Pravin Gordhan was set to be replaced in a cabinet reshuffle.
USD/ZAR hit highs of 13.10 and was last at 12.99, up 1.98% for the day after jumping 2.5% on Monday.