Investing.com - The dollar struggled near six month lows against a basket of the other major currencies on Tuesday as investors waited for U.S. President Donald Trump’s budget proposal to be presented to Congress.
Trump’s budget proposals include cuts to Medicaid and changes to other assistance programs for low-income citizens and aims to cut spending by $3.6 trillion over 10 years, balancing the budget by the end of the decade.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was last at 96.93, not far from Monday’s lows of 96.83, the lowest trough since November 9.
The index has given up all the gains it had made following the presidential election in November amid fears that the U.S. political system could become engulfed by crisis, preventing lawmakers from pushing through tax or spending reforms.
Recent weeks have seen a steady stream of revelations surrounding the FBI’s investigation into alleged Russian interference in November’s presidential election and reports that Trump attempted to interfere with the judicial process.
The dollar has also been pressured lower by the resurgent euro amid renewed focus on monetary policy expectations as political risks in Europe receded.
The euro hit fresh six-month highs on Tuesday after data showing that euro zone private sector growth held steady at a six year high in May, indicating that the economic recovery in the bloc is deepening.
EUR/USD hit a high of 1.1267, the most since November 9 before pulling back to 1.1236 by 11.12 ET.
The data came a day after the euro bounced higher when German Chancellor Angela Merkel called it “too weak”.
The pound remained softer but was off the lows after a deadly suicide bombing at a pop concert in Manchester overnight, in which at least 22 people were killed, including some children, and 59 injured.
GBP/USD was last at 1.3007 while GBP/JPY was a touch lower at 144.57.
The dollar was slightly lower against the yen, with USD/JPY at 111.19.
The weaker greenback boosted the Australian and New Zealand dollars, with AUD/USD up 0.27% to 0.7497 and NZD/USD rising 0.46% to 0.7027.