Dollar extends losses on U.S. political concerns; euro rises to $1.11

Dollar extends losses on U.S. political concerns; euro rises to $1.11

Dollar extends losses on U.S. political concerns; euro rises to $1.11

LONDON, May 17 (Reuters) - The yen rose to its highest in two weeks and the Swiss franc hit a seven-week high against the U.S. dollar on Wednesday as an intensifying political scandal around U.S. President Donald Trump fuelled demand for safe-haven assets.

Meanwhile the US Dollar was weakened overnight on Monday following media reports that President Donald Trump shared highly classified information with Russian Federation.

The disclosure adds to concern over the administration's chances of passing legislation, including tax reform, that has been priced in partly by financial markets.

The S&P 500 and Dow Jones was down slightly on Tuesday after a slew of mixed economic data and earnings while the Nasdaq hit another record as it was boosted by gains in technology stocks.

SINGAPORE, May 16 The euro touched a one-week high on Tuesday ahead of the release of euro zone gross domestic product data, as the dollar struggled to gain traction in the wake of a surprisingly soft USA manufacturing report.

The downtrend in the USA currency could extend further, according to Boris Schlossberg, managing director of FX strategy at BK Asset Management, given the potential for further political fallout relating to Trump's intelligence disclosure.

The Japanese yen strengthened 0.64 percent versus the greenback at 113.08 per dollar, while Sterling was last trading at $1.2919, up 0.20 percent on the day.

The U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, fell 0.13% to 97.97.

In a separate report on Tuesday, the Commerce Department said housing starts dropped 2.6% to a seasonally adjusted annual rate of 1.17 million units, the lowest level in five months and below expectations for a 3.7% rise.

Amidst ongoing issues regarding declining crude oil prices and issues with Trump revealing classified information to Russia's top diplomat, the dollar hit a six-month low continuing from a recent snag the currency has hit in the past week. Traders shared concerns about the feasibility of the Trump agenda of tax cuts and deregulation, without taking their eyes off the expected economic growth.

"We are approaching a short-term resistance as the breadth of this rise is very unhealthy and the market momentum looks exhausted", said Alex Wong, a fund manager at Ample Capital Ltd in Hong Kong, with about $130 million under management. The FTSE 100 index of leading British shares was 0.1 percent lower at 7,519 and near all-time highs.

The Russian ruble is little changed at 56.3399 per dollar, while Brent crude oil, the global benchmark, is up by 0.6% at $52.15 per barrel.

Euro rose against dollar on Tuesday as the dollar slumped after the release of weaker-than-expected data on US housing starts, adding to the economic reports that have missed predictions. The euro was up 0.2 percent against the dollar at $1.11, the first time it's breached that level since November, when Trump surprisingly won the US election.

Benchmark 10-year notes gained 3/32 in price to yield 2.33 percent, down from 2.36 percent before the data's release. USA crude lost 8 cents to $48.77 a barrel.

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