The U.S. dollar index touched to the lowest level yesterday, since early November, hurt by weaker-than-expected U.S. housing data and also the political turmoil in Washington raised concerns about the passing expected legislation.
A rally in the euro was resistant by dollar losses, prompted by reports that the U.S. President Donald Trump revealed information that was highly sensitive to senior Russian officials last week at a meeting.
This disclosure has increased the concern over the administration’s possibilities of passing legislation, including reformation of tax that is priced by financial markets. The indexes of major U.S. stock remain near or at record highs, supported by the tough earnings for S&P 500 components since 2011.
The dollar fell after U.S. manufacturing production recording its biggest increase in more than three years.
The U.S. currency downtrend may extend further, as per FX strategy, managing director of Boris Schlossberg, stating the further political fallout being the reason relating the intelligence disclosure of Trump.
“It appears progressively every day it is going beyond any normal sense of leadership and eventually the political volatility affects economic volatility,” said Schlossberg.
The dollar index fell 0.73 percent, with euro going up up 0.99 percent to $1.1082. The dollar index had reached in early January 14-year highs that Trump’s plans for tax cuts and infrastructure spending expected to boost growth and inflation. But, now it has fallen four consecutive sessions, hitting the lows of six-month.
On Wall Street, the S&P 500 and Nasdaq Composite reached high record, but the S&P retreated slightly negative. Technology stocks were the key gains for the Nasdaq and S&P, but traders are worried about the feasibility of the Trump agenda of deregulation and tax cuts.