Strategist: The buck is 'trading badly on all Trump-negative news'
The dollar lost more ground against its major rivals Wednesday, with analysts attributing the decline in large part to escalating U.S. political concerns following a report that President Donald Trump tried to influence an FBI probe into links between his inner circle and Russia.
The ICE Dollar Index declined to 98.05, down from 98.11 late Tuesday and touching levels last seen Nov. 9, the day after Election Day. That comes after the gauge lost 0.8% on Tuesday (http://www.marketwatch.com/story/dollar-slides-to-6-month-low-as-worries-about-trump-return-2017-05-16) after reports Trump shared classified information with Russia.
The buck "is trading badly on all Trump-negative news, though there is arguably a limit to how far that can run," said Elsa Lignos, global head of foreign-exchange strategy at RBC Capital Markets, in a note.
The president in February asked then-FBI Director James Comey to shut down an investigation (http://www.marketwatch.com/story/trump-asked-comey-to-drop-flynn-investigation-report-2017-05-16) into the actions of former National Security Adviser Mike Flynn a day after Flynn's ouster, according to a New York Times report Tuesday. The White House on Tuesday denied the report, while the Times said Comey wrote memos after every meeting and phone call with Trump to provide a paper trail of his attempts to influence the Federal Bureau of Investigation's probe.
"For now it is mainly playing out with a build-up of EUR longs," Lignos added, noting that European political risk has dissipated while U.S. political risk is rising.
The euro changed hands at $1.1092, up from $1.1083 late Tuesday in New York.
The Japanese yen -- which often draws haven demand when geopolitical worries flare up -- was gaining in particular against the dollar. The greenback was trading at Yen112.35, down about 0.6% from Yen113.12 late Tuesday in New York.
The pound was buying $1.2935, up from $1.2915.
(END) Dow Jones Newswires
May 17, 2017 04:11 ET (08:11 GMT)