NEW YORK (Reuters) – The dollar hit its lowest against the euro and Swiss franc in more than a year on Tuesday, with the broader dollar index touching a more than 10-month low, on reduced confidence in U.S. President Donald Trump’s agenda and jitters over hawkish central banks abroad.
Republican senators’ effort to pass their own healthcare overhaul bill collapsed late on Monday, stoking doubts over the likelihood that Trump’s pro-growth agenda would come to fruition.
Traders also remained doubtful the Federal Reserve would be able to raise interest rates again this year, while other central banks including the European Central Bank and Bank of England have signalled a more hawkish bent towards tightening policy.
“The setback for Trump is a setback for the U.S. dollar,” said Kathy Lien, managing director at BK Asset Management in New York. “Based upon the failed repeal of Obamacare, I think that really casts doubt on the Trump administration’s broader strategies.”
The euro touched $1.1583 against the dollar, its strongest since early May 2016, with analysts noting traders who had “shorted” or bet against the euro were being forced to “cover” or repurchase the currency.