US dollar has worst week in over a year amid political uncertainty

An illustration picture shows euro and US dollar banknotes and coins April 8, 2017. — Reuters pic An illustration picture shows euro and banknotes and coins April 8, 2017. — Reuters pic NEW YORK, May 10 — The US dollar fell yesterday, adding to its worst week since April 2016 against a basket of major currencies, and having surrendered the gains made since Donald Trump was elected US president.

The dollar index, which tracks the greenback against a basket of six world currencies, has shed more than 2 per cent this week. Yesterday, it fell 0.75 per cent, hitting its lowest since Nov 9, the day after the US election.

Uproar over Trump’s recent firing of FBI Director James Comey, who was overseeing an investigation into possible links between the president’s team and Russia, has pressured the US dollar.

“The US dollar overall, across the board, has been getting beat up this week and a lot of that has to do with the political risk here in DC,” said John Doyle, director of markets at Tempus Inc in Washington. “While we saw a little bit of a reprieve yesterday, we’re right back on that dollar weakness train.”

The US currency has also suffered from a resurgent euro, which has the largest weighting in the dollar index. The single currency has gained more than 2.5 per cent this week, headed for its best performance since February 2016. It rose 0.95 per cent yesterday to a six-month high of US$1.1205.

The advance of the euro was spurred by a possible winding down of the European ’s expansive monetary stimulus programme, said analysts, with recent data pointing to a robust recovery in the euro zone.

Against the safe-haven Swiss franc, the US dollar fell 0.65 per cent, touching a six-month low. It was on pace for its largest weekly percentage fall since February 2016.

The US dollar fell 0.3 per cent against the yen to 111.14 and had its first weekly drop in five against the Japanese currency.

The US dollar moved broadly lower after a report that a senior White House adviser is a person of interest in the investigation into possible coordination between the Trump campaign and Russia.

The greenback also sank against emerging market currencies, which were dragged lower on Thursday by news that Brazilian President Michel Temer had been recorded offering bribes to silence testimony by a potential witness in the country’s wide-ranging corruption probe.

The US dollar fell 3.3 per cent against the Brazilian real .

Oil-linked emerging market currencies like the Mexican and Colombian pesos and the Russian rouble gained around 1 per cent versus the dollar, also boosted by a rise in oil prices. — Reuters

Source: The Malay Mail Online

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