Forex - Dollar near 13-month lows with Fed US politics in focus

© Reuters. Dollar near 13-month lows, with Fed, U.S. politics in focus

Investing.com -The dollar was struggling near 13-month lows against a currency basket on Tuesday as investors watched political developments in Washington ahead of this week’s Federal Reserve meeting.

The , which measures the greenback’s strength against a trade-weighted basket of six major currencies, was at 93.79 by 03.25 a.m. ET (07.25 a.m. GMT), not far from Monday’s low of 93.65, its weakest since June 2016.

Investors remained focused on the investigation into alleged links between U.S. President Donald Trump’s administration and Russia in last year’s election.

On Monday, Jared Kushner, Trump’s son-in-law and a senior White House adviser, but said he did not collude with Moscow.

Investors fear the persistent political turmoil will of tax cuts and infrastructure spending, which helped propel the dollar to 14-year peaks after the November election.

Doubts over the plans for a third rate hike this year have also fed into dollar weakness.

The Fed is to hold its next meeting on Wednesday and is widely expected to hold policy steady. Officials may also give some insight into its plans to start normalizing its balance sheet.

The dollar was a touch lower against the yen, with dipping to 110.98. On Monday the pair hit 110.61, the lowest level since mid-June.

The euro was steady against the dollar, with at 1.1651, close to Monday’s 23-month high of 1.1684.

Demand for the euro continued to be underpinned by expectations that the European Central Bank is moving closer to tapering its bond-buying program.

Sterling was little changed against the dollar, with at 1.3020.

The Australian dollar was a touch higher, with rising 0.2% to 0.7939, while the New Zealand dollar edged lower, with at 0.7430.

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