MW: Dollar falls to lowest level in 4 months after health bill is pulled
A key U.S. dollar index on Monday fell to its lowest level in more than four months as the failure of a President Trump-backed measure to repeal Obamacare gave investors a cue to step away from the buck.
The ICE Dollar Index DXY, -0.46% , which measures the currency against a basket of six major rivals, was down 0.6% at 99.08. The gauge has traded on Monday as low as 99.04, representing its lowest mark since the first half of November, according to FactSet data.
The dollar USDJPY, -1.01% dropped against the yen to ÂĄ110.25, down from ÂĄ111.20 late Friday in New York. The euro EURUSD, +0.8797% rose to $1.0864, up from $1.0799, while the British pound GBPUSD, +1.0181% moved up to $1.2564 from $1.2490.
â€śThis is the market reacting to Donald Trumpâ€™s failure to implement one of his major campaign promises,â€ť said Bart Wakabayashi, Tokyo branch manager for State Street.
The setback for the White House has strengthened uncertainty over the U.S. administrationâ€™s ability to push through its agenda. It has added momentum to an unraveling of support for the dollar, which has picked up steam since the Federal Reserve decided to raise U.S. interest rates.
Investors see the failure of the U.S. administration to secure the votes needed to pass the health-care bill as a â€śharbinger of things to come,â€ť Wakabayashi said. â€śThey see it as a lot of opposition to [Trumpâ€™s] policies. They see general risk on trade and fiscal policy, and a lot of promises we may have to revisit and cross out some of them.â€ť
It will take robust monthly employment figures or hawkish guidance from the Fed to stop the dollarâ€™s slide, said Masashi Murata, currency strategist at Brown Brothers Harriman in Tokyo.