Investing.com - The dollar edged higher against a basket of the other major currencies on Thursday, regaining ground after slipping in the previous session amid renewed concerns over U.S. political uncertainty.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.14% to 93.27 by 03:22 AM ET (07:22 GMT).
U.S. President Donald Trump threatened Tuesday to shut down the government to secure funding to build a wall along the U.S.-Mexican border. He also raised the prospect of pulling out of the North American Free Trade Agreement with Mexico and Canada.
The greenback has weakened recent sessions amid renewed investor concerns about the Trump administration's ability to deliver on its economic policy agenda.
Persistent doubts about the prospects for a third interest rate hike by the Federal Reserve this year have also fed into dollar weakness.
Lower rates typically weigh on the dollar by making U.S. assets less attractive to yield-seeking investors.
Market participants were awaiting comments from Fed Chair Janet Yellen at the annual central banking conference in Jackson Hole on Friday for clues on how policymakers view the economy. Some investors believe Yellen may make the case for a third rate hike this year.
The dollar was higher against the yen, with USD/JPY rising 0.25% to 109.29 after ending Wednesday’s session down 0.61%.
The euro was a touch lower, with EUR/USD dipping 0.11% to 1.1794. The single currency was boosted on Wednesday after private sector survey data indicated that the recovery in the euro area remains solid.
Market watchers were looking ahead to a speech by European Central Bank President Mario Draghi in Jackson Hole on Friday.
Draghi was not widely expected to deliver any new policy message in his speech, despite speculation over how soon the central bank plans to start scaling back its stimulus program.
The euro was trading near 10-month highs against the broadly weaker sterling, with EUR/GBP last at 0.9216, holding just below Wednesday’s highs of 0.9235.
The pound was little changed against the greenback, with GBP/USD at 1.2791.
Sterling has been pressured lower by growing expectations that the Bank of England will keep interest rates on hold in the coming months amid concerns over the economic impact from Brexit.