Investing.com - The dollar edged back from a six month trough against a basket of the other major currencies on Monday amid relief that that the political turmoil engulfing the Trump administration hasn’t intensified.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.29% to 97.28, easing off Friday’s low of 96.97, which was its deepest trough since November 9.
With U.S. President Donald Trump on a trip to the Middle East, the steady stream of revelations surrounding the FBI’s investigation into alleged Russian interference in November’s presidential election has receded.
The dollar came under renewed selling pressure on Friday following reports that a senior White House adviser is a person of interest in the probe into Russia’s role in the election.
The dollar has been hard hit by fears that the U.S. political system could become engulfed by crisis, preventing lawmakers from pushing through tax or spending reforms.
The euro was lower against the dollar, with EUR/USD down 0.29% to 1.1174, after rising to a six-month high of 1.1211 on Friday.
Demand for the euro continued to be underpinned as investors shifted their attention back to the outlook for monetary policy as concerns over political risks receded.
Recent economic data has indicated that the economic recovery in the currency bloc is deepening, fueling speculation over how soon the European Central Bank could scale back its stimulus program.
The dollar was little changed against the safe haven yen, with USD/JPY at 111.23, but gains were limited amid heightened geopolitical tensions with North Korea.
Sterling was also lower against the dollar, with GBP/USD down 0.45% at 1.2976.
Investors were looking ahead to Trump’s budget proposal, due to be unveiled on Tuesday following reports that it will include cuts to Medicaid and propose changes to other assistance programs for low-income Americans.
Market watchers were also awaiting Wednesday’s Federal Reserve meeting minutes, amid expectations for a June rate hike.