Investing.com – The dollar sank to seven-month lows, wiping out all its gains since Donald Trump was elected U.S. president as investors ditched riskier assets for safe havens ahead of a trio of risk events on Thursday.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell by 0.24% to 96.53.
Although investors widely expect the Federal Reserve to hike its benchmark rate at its June 13-14 meeting, investors began to question whether the U.S. economy can sustain two additional rate hikes in the wake of recent economic data suggesting that the economy is not as robust as hoped.
U.S. manufacturing activity in May grew at a slower pace, while data from the U.S. Labor Department last Friday showed that the economy created far fewer jobs than expected.
A trio of risk events on Thursday, are expected to continue to drive sentiment across markets, as investors will contend with Britain’s general election, the European Central Bank’s policy meeting and former FBI chief James Comey’s testimony before the Senate Intelligence Committee.
Investors expect a rise in U.S. political turmoil on Thursday, when former FBI director James Comey testifies about Russia’s alleged involvement in the U.S election and Trump’s alleged attempt to halt an investigation into former national security advisor Michael Flynn
The Trump administration has struggled to progress on its pro-growth economic agenda, which is widely viewed as a boon for the dollar, amid continued political turmoil engulfing President Trump.
GBP/USD fell to $1.2890, down 0.12%, as sterling continued to ebb and flow with the release of each opinion poll ahead of the general election on Thursday.
Opinion polls have shown that Prime Minister Theresa May’s lead over the Labour party has been significantly reduced in recent weeks.
EUR/USD rose 0.18% to $1.1275 while EUR/GBP gained 0.37% to 0.8752, as investors look ahead to the European Central Bank (ECB) interest rate decision and a press conference from ECB president Mario Draghi on Thursday.
USD/JPY fell to Y109.31, down 1.06%, while USD/CAD traded at $1.3484, down 0.17%.