Dollar heads for worst week in over a year amid political uncertainty

The U.S. dollar was poised on Friday for its worst week since April 2016 against a basket of major currencies, having given up much of the gains made since Donald Trump was elected U.S. president.

The dollar index, which tracks the greenback against a basket of six world currencies, has shed around 2 percent this week. On Friday, it fell 0.6 percent, hitting its lowest since Nov. 9, the day of the U.S. election results.

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, have pressured the dollar.

 “The 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, were right back on that dollar weakness train.”

The U.S. currency has also suffered from a resurgent euro, which has gained more than 2 percent this week and was on track for its best performance since February 2016. It rose 0.8 percent on Friday to hit a six-month high of $1.1196.

That advance of the euro, said analysts, was spurred by a possible winding back of the European Central Bank’s expansive monetary stimulus program, with data pointing to a robust recovery in the euro zone.

 

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