Early trade in New York: Dollar down against basket of major currencies

The dollar edged down against a basket of major currencies on Monday, surrendering some gains after a sharp rally that followed Donald Trump's surprise victory in the US presidential election. The greenback had surged more than 4 percent against a basket of currencies in the wake of the election earlier this month, with investors expecting a Trump administration to bring an expansion of fiscal policy, boosting inflation and pushing up interest rates.
But after hitting an almost 14-year-high of 102.05 on Thursday, the dollar dipped on Friday and added to those losses on Monday, with the index falling to 101.32. The greenback fell as much as 1.5 percent to 111.32 yen, having soared more than 8 percent in the wake of Trump's victory to its highest levels in eight months against the safe-haven Japanese currency. However, it recovered about half of those losses, last down 0.6 percent at 112.38 yen.
Most analysts said the dip in the dollar since Friday was simply a corrective pullback with the greenback still on track for its strongest two-month gain since early 2015. "It looks much more like a correction than anything else - a Monday morning clearing of the decks before the end of the month," said Societe Generale macro strategist Kit Juckes in London.
However, other analysts suggested that the dollar's dive against the yen was the result of the President-elect's tweets over the weekend. Trump alleged that "illegal" votes were responsible for his loss in the popular vote to Democratic challenger Hillary Clinton in response to a recount effort organised by Green Party presidential nominee Jill Stein. The euro climbed as much as 1.1 percent against the greenback to an 11-day high of $1.0686, also boosted by the election of Francois Fillon as the center-right candidate in next year's French presidential elections. The euro retreated from those gains by the start of North American trading, up 0.1 percent against the dollar at $1.0595.