Investing.com - The dollar slumped to the lowest level since November against a basket of the other major currencies on Monday amid growing doubts over the Trump administration’s ability to deliver on a pro-growth economic agenda.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.71% at 98.88 by 11.00 ET, after plumbing 98.67, its lowest trough since November 11.
The index had surged to almost 14-year highs in early January on the back of expectations for a strong economic recovery and higher inflation, the so called ‘Trump trade’.
A planned vote on legislation to repeal and replace the Affordable Care Act was pulled on Friday night after it became apparent that it didn’t have enough support from Republicans.
The vote had been viewed by investors as a critical test of President Trump's ability to work with Congress to deliver on his campaign economic pledges, including tax cuts and infrastructure spending.
The dollar was lower against the traditional safe haven yen, with USD/JPY last at 110.40 after earlier falling as low as 110.12, the weakest level since November 18.
The euro hit its highest level since November, with EUR/USD climbing 0.81% to 1.0885.
The single currency was boosted after European Central Bank executive board member Sabine Lautenschlager said the markets should get ready for “a change” in ECB policy.
The remarks, made during the ECB’s annual press conference on banking supervision, added to speculation that it could soon slow its quantitative easing stimulus program.
Sterling was also higher against the weaker dollar, with GBP/USD advancing 0.79% to 1.2571.
The selloff in the dollar overshadowed concerns about Britain beginning the formal process of exiting the European Union later in the week.
Sterling was little changed against the euro, with EUR/GBP at 0.8656.