Dollar Tumbles on Trump’s Political Uncertainty

The dollar pared gains from the post election rally that drove the currency to its highest level since 2002, in an indication that investors are losing more faith in the so-called Trump trade. The ICE U.S. dollar index, which tracks the dollar versus a basket of six peers, dropped 0.8 percent in late Wednesday in New York to 97.39. The greenback fell versus the Japanese yen, euro and the British pound. Just days ahead of the election of President Donald Trump, the dollar surged in a wide market rally.

Several investors fear that political turmoil in Washington is wearing away the U.S. administration's ability to deliver on its tax-overhaul and fiscal-spending proposals. Such plans were highly anticipated to stimulate U.S. economic growth and also helped sent the greenback to a 14-year peak following the election.

Hedge funds and other investors have pulled back wagers on a firmer dollar, which has fallen to its weakest level since early October.

The dollar dropped two percent against the perceived safe-haven yen. It is the largest daily percentage fall since July 2016. Other assets seen as safe, which includes the Swiss franc and gold, have all gained.

Markets are implying a 65 percent likelihood that the Federal Reserve will hike interest rates at its next meeting in June, CME Group data revealed.

News are provided by InstaForex