The dollar fell against a basket of other major currencies on Friday, as Treasury yields slipped and investors remained skeptical of US Republicans' efforts to pass tax cuts after a barren first year for the Trump administration in Congress. The dollar index, which measures the greenback against six rival currencies, was down 0.31 percent to 93.645. For the week, the index was down 0.8 percent.
The euro was up 0.23 percent to $1.1796. The greenback was down 0.82 percent against the Japanese yen. "The dollar is weaker across the board, especially against the yen, but also against most of the emerging market currencies," said Win Thin, head of emerging markets currency strategy at Brown Brothers Harriman in New York. "I think part of it is just lower rates," he said.
US Treasury yields edged lower on Friday, in line with falls on Wall Street as investors weighed the fate of the Republicans' tax cut plan. Congressional Republicans took important steps on Thursday toward the biggest US tax code overhaul since the 1980s, with the House of Representatives approving a broad package of tax cuts and a Senate panel advancing its own version of the legislation sought by senior lawmakers and President Donald Trump.
The House vote shifted the tax debate to the Senate, where a tax-writing panel finished debating and approved a bill late on Thursday. That measure has already encountered resistance from some within the Republican ranks. Full Senate action is expected after next week's Thanksgiving holiday. "The market is coming to realize that it's going to be a little bit more difficult than thought," said Thin.
The dollar was also pressured by a report on Thursday that Special Counsel Robert Mueller's investigators probing possible Russian interference in the 2016 US election had subpoenaed Trump's election campaign for documents. "This is unquestioningly going to weigh on the administration's ability to pass tax reform and enact any other fiscal reform measures that would support the economy," said Karl Schamotta, director of global product and market strategy at Cambridge Global Payments in Toronto.
The dollar firmed briefly after data showed US homebuilding jumped to a one-year high in October, but failed to hold gains. The Australian and New Zealand dollars both headed for sizable weekly falls against the greenback as their yield buffers over the US dollar shrank to the smallest in over 17 years, undermining their appeal as carry trades. The Australian dollar was down 0.29 percent against the greenback, and the kiwi was 0.54 percent lower against its US counterpart.