The dollar lost further ground on Wednesday and hit a four-month low against the safe-haven yen, with investors rethinking the growth expectations under a Trump administration that had pushed the greenback to a 14-year peak and stocks to record highs. The US dollar, which slipped after last week's less hawkish US Federal Reserve monetary policy statement, took a turn for the worse this week amid growing doubt about the potential pace of US interest rate increases.
On Wednesday, the dollar index, which measures the greenback against a basket of six major currencies, was down 0.2 percent at 99.617, its lowest since February 3. "We had moved ahead in anticipation of fiscal boosts and now are about 60 days into the (new) administration and the market is yet to see any materiality behind the fiscal policy," said Minh Trang, senior currency trader at Silicon Valley Bank in Santa Clara, California.
"The longer there is lack of materiality the greater the scepticism." Against the yen, which investors traditionally flock to during times of risk aversion, the dollar fell as much as 0.85 percent to a four-month low of 110.76 yen, with nervousness deepening ahead of a key healthcare vote in US Congress on Thursday. The US currency has also felt pressure from a resurgent euro in recent days, on growing expectations of a tightening in European Central Bank monetary policy this year, and on bets the anti-euro candidate Marine Le Pen will be defeated in the French presidential elections. The euro was trading up 0.06 percent on the day at $1.0814. Sterling fell to the day's low of $1.2426 against the dollar after loud bangs were heard outside Britain's parliament. Police said they were called to a firearms incident on Westminster Bridge near parliament.
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