Investing.com - The dollar pared gains against other major counterparts on Monday, as political turmoil in Washington weighed, although news a highly anticipated tax reform bill was voted by the Senate continued to support the greenback.
The greenback strengthened after the U.S. Senate approved a tax overhaul late Friday, marking President Donald Trump first major political victory.
The Trump administration has said its tax cuts will generate growth and spark inflation, which investors hope will prompt a faster pace of monetary tightening by the Federal Reserve.
However, fresh political turmoil in the U.S. was expected to weigh after former national security adviser Michael Flynn said he is prepared to cooperate in the special counsel probe into alleged links between the Trump campaign and Russia during last year’s election.
Flynn pleaded guilty Friday morning to lying to the Federal Bureau of Investigation about his communications with the Russian ambassador to the U.S. in December 2016.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.40% at 93.17 by 05:15 a.m. ET (09:15 GMT).
EUR/USD slid 0.34% to 1.1855, while GBP/USD declined 0.30% to trade at 1.3432.
The pound had rallied last week amid news Brexit talks were moving in a positive direction.
However, investors grew more cautious as the European Union gave UK Prime Minister Theresa May until Monday to propose a more comprehensive divorce offer.
Elsewhere, the yen and the Swiss franc were lower, with USD/JPY up 0.62% at 112.89 and with USD/CHF gaining 0.71% to 0.9832.
The Australian and New Zealand dollars were also weaker, with AUD/USD down 0.12% at 0.7604 and with NZD/USD sliding 0.39% to 0.6864.
Meanwhile, USD/CAD held steady at 1.2691.