Market Research

Dollar continues to slide as US political turmoil dominates

20-May-2017 @ 01:56 PM

The dollar continued to fall and hit a fresh six-month low against other major currencies on Friday, as U.S. political turmoil continued to dominate market sentiment, weighing heavily on the greenback.

EUR/USD gained 0.84% to a fresh six-month peak of 1.1196.

But the dollar remained under broad selling pressure following reports this week that U.S. President Donald Trump asked former FBI Director James Comey to end the agency's investigation into ties between former White House national security adviser Michael Flynn and Russia.

Former FBI Director Robert Mueller was appointed on Wednesday by the Justice Department as a special counsel to take over the probe into Russia's interference in the 2016 election.

Elsewhere, GBP/USD advanced 0.64% to 1.3023, just off the previous session’s eight-month high of 1.3051.

USD/JPY held steady at 111.46, while USD/CHF declined 0.55% to 0.9744.

The Australian and New Zealand dollars were stronger, with AUD/USD up 0.38% at 0.7446 and with NZD/USD adding 0.12% to 0.6909.

Meanwhile, USD/CAD slid 0.35% to trade at a three-week low of 1.3556.

Statistics Canada reported on Friday that the consumer price index rose 0.4% in April, in line with market expectations. Year-on-year, consumer prices increased by 1.6% last month, disappointing expectations for a 1.7% gain.

Data also showed that Canada’s retail sales increased by 0.7% in March, beating expectations for a 0.4% gain and after a revised 0.4% fall the previous month.

Core retail sales, which exclude automobiles, slipped 0.2% in March, compared to expectations for a 0.2% rise.

But the commodity-related loonie was supported by a sharp rally in oil prices on Friday, amid hopes major oil producers will decide to extend their current supply cut plan.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.65% at a fresh six-month low of 97.13

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