US dollar in worst trading week in a year as Trump’s political woes hound greenback

The US dollar fell on Friday, for its worst week since April 2016 against a basket of major currencies, having surrendered the gains made since Donald Trump was elected US president.

The dollar index, which tracks the greenback against a basket of six world currencies, has shed more than 2 per cent this week. On Friday, it fell 0.75 per cent, hitting its lowest since November 9, the day after the US election.

Uproar over Trump’s recent firing of FBI Director James Comey, who was overseeing an investigation into possible links between the president’s team and Russia, has pressured the dollar.

“The dollar overall, across the board, has been getting beat up this week and a lot of that has to do with the political risk here in DC,” said John Doyle, director of markets at Tempus Inc in Washington. “While we saw a little bit of a reprieve yesterday (Thursday), we’re right back on that dollar weakness train.”

The US currency has also suffered from a resurgent euro, which has the largest weighting in the dollar index. The single currency has gained more than 2.5 per cent this week, headed for its best performance since February 2016. It rose 0.95 per cent on Friday to a six-month high of US$1.1205.

The advance of the euro was spurred by a possible winding down of the European Central Bank’s expansive monetary stimulus programme, said analysts, with recent data pointing to a robust recovery in the euro zone.