Investing.com - The dollar fell against a currency basket on Monday as the lack of economic policy detail in U.S. President Donald Trump’s inauguration speech coupled with concerns over his protectionist rhetoric weighed.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.44% to 100.33, the lowest level since December 8.
The index climbed around 3.5% since Trump’s election win in November, buoyed by expectations that his pledges to cut taxes and hike infrastructure spending would spur growth in the U.S. economy, leading to inflation and higher interest rates.
But the index has fallen 1.9% so far this month amid a lack of clarity over his economic policies, worries over his protectionist stance and following recent remarks in which he said the dollar was too strong.
On Friday, Trump said his administration would put "America first" and also promised new roads, bridges and highways.
But market sentiment was hit by the negative tone of the speech, which underlined uncertainty over how Trump will govern.
The dollar was sharply lower against the traditional safe haven yen, with USD/JPY trading at 113.55, off 0.94% after touching overnight lows of 113.17.
The euro rose to five-week highs against the dollar, with EUR/USD climbing 0.36% to 1.0740.
Sterling also hit five-week highs as the dollar sold off, with GBP/USD up 0.59% to 1.2444.
Meanwhile, the Mexican peso added to Friday’s strong gains after Trump’s inauguration speech didn't specifically mention Mexico.
USD/MXN was down 0.85% at 21.40 after ending Friday’s session down 1.64%.
The Mexican peso has been hard hit by fears over potential changes to U.S. trade policy under the Trump administration.