The dollar struggled near a 13-month low against a basket of major currencies on Monday as US political woes dampened hopes for quick passage of President Donald Trump’s stimulus and tax reform agendas. The Trump administration, already dogged by investigations into alleged Russian meddling in the U.S. election, took a fresh hit on Friday after White House spokesman Sean Spicer resigned, highlighting an upheaval within the president’s inner circle.
The dollar index against a group of six currencies was little changed at 93.854, after touching 93.847, its lowest since June 2016.
“For any chance of the dollar bouncing back in the near term, it will need a rebound in U.S. yields,” said Junichi Ishikawa, senior forex strategist at IG Securities in Tokyo. “The current US political situation is weighing heavily on US yields. So we will need strong US data to dislodge US yields from their low levels.”
The benchmark 10-year US Treasury note yield hit a three-week low on Friday with a retreat in Wall Street shares kindling safe-haven demand for debt. The euro was 0.2 percent higher at $1.1681 after advancing to a 23-month high of $1.1683 on Friday.
The common currency has been on a bullish footing after what the markets perceived as hawkish talk from European Central Bank President Mario Draghi in recent weeks. The dollar slipped 0.2 percent to 110.965 yen, with the Japanese currency at its strongest in five weeks. The Australian dollar traded at $0.7925 after being pushed down from a 26-month high of $0.7992 scaled on Friday.
The Aussie had advanced on the dollar’s broad weakness before its rally was tempered by dovish comments from Reserve Bank of Australia (RBA) deputy governor Guy Debelle on Friday. The New Zealand dollar fared better, staying in close reach of $0.7460, its highest since September 2016 scaled on Friday.