The dollar slipped to a more than six-month low against a basket of currencies on Monday, extending its losses from last week, as an uncertain US political climate continues to weigh on the greenback. The dollar index, which tracks the greenback against a basket of six major rivals, was down 0.15 percent to 96.993. It fell to a low of 96.797, its lowest since November 9, earlier in the session.
"I think it is a continuation of the move we have seen since mid-April," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington. "The dollar's broad declines are driven by the increasingly mixed tone to US economic data, which has led to investors questioning the extent to which the Fed will be raising rates this year. The political climate is also acting as a key headwind for the dollar." The dollar fell more than 2 percent last week, logging its worst performance in over a year, amid growing concerns over US President Donald Trump's recent firing of FBI Director James Comey, who was overseeing an investigation into possible links between the president's team and Russia.
The greenback also came under pressure from a rallying euro, which hit a more than six-month high against the dollar on Monday after Germany's Angela Merkel prefaced a summit of G7 leaders later this week by saying a "too weak" currency was behind her country's massive trade surplus.
Speaking to students at a secondary school in Berlin, Merkel said that Germany's huge export earnings were propelled by two factors over which the government had no influence, namely the euro's exchange rate and oil prices. The euro was up 0.23 percent against the dollar at $1.123 after hitting a high of $1.1263, earlier in the session. Meanwhile, sterling slipped against the dollar after a pair of polls over the weekend showing Prime Minister Theresa May's opinion poll lead falling back into single figures ahead of next month's election.
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