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Dollar Weakens Amidst Growing Concerns over Trump Administration

The dollar (CURRENCY:USD) continues to edge lower as controversy in Washington continues to evoke concerns about the Trump administration. The currency was yet again under renewed pressure in Tuesday early trading session having emerged the Donald Trump might have shared secret details on Middle Eastern intelligence sources with Russian diplomats last week.

Dollar Weakens

Against the Australian Dollar (AUDUSD) the greenback was trading at lows of 0.7422 having shed 0.12% in value in early trading session. Against the Yen (USDJPY) the dollar was down by 0.21% to lows of 113.54. The Euro (EURUSD) continues to rally against the dollar having clocked season highs of 1.10442.

Demand for the Euro has improved in recent trading sessions on data showing that the Eurozone gross domestic product grew by 0.5% in the last quarter. Germany economic sentiment improving slightly in May, also continues to offer support to the Euro.

The pound (GBPUSD) on the other hand continues to weaken across the board on UK inflation rising to its highest level since September 2013. Having touched season highs of 1.2957 the pound has since tanked to lows of 1.2877 against the dollar.

 FED Hike Concerns

The dollar index, which measures greenback strength against other six major currencies has since dropped to lows of 98.50 under renewed pressure. Weak economic data from the U.S all but continues to fuel the selloff wave as concerns over the health of the world largest economy grips the market.

The federal reserve bank of New York said that its manufacturing index fell to -1 from 5 in April on declining orders. Softer manufacturing data compounded by weak sales report last week, all but continues to evoke concerns about the U.S central bank increasing the benchmark rate at its next meeting in June.

Trader’s sentiments on a rate hike next month has since dropped to 70.6% compared to 81% as of last week. Looking ahead, building permits report, housing starts and Industrial production should have an impact on dollar strength given recent reaction to big economic data. Initial jobless claims and manufacturing activity in the Philadelphia region on Thursday is also expected to have an impact on the strength of the dollar, against other currencies.

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