FOREX-US dollar index hits 15-month low on Fed political uncertainty

(Updates prices, adds comments; changes byline, dateline, pvs LONDON)

* Weak U.S. construction spending, auto sales data hurt dollar

* December Fed rate hike expectations around 50 pct -CME FedWatch

* U.S. political uncertainty weighs on dollar

* Dollar falls below 110 yen for first time in over 6 weeks

By Sam Forgione

NEW YORK, Aug 1 (Reuters) - The U.S. dollar briefly touched a 15-month low against a basket of major currencies on Tuesday on political turmoil in Washington and weak U.S. economic data that kept the Federal Reserve's policy outlook uncertain.

While the dollar was last higher on the day as investors consolidated positions, it was not far from its lowest in more than a year against major rivals as uncertainty was expected to continue weighing on the greenback following President Donald Trump's ouster of White House communications chief Anthony Scaramucci on Monday.

Concerns also persisted about whether the Fed would raise interest rates again this year. Expectations for a December rate hike from the U.S. central bank last stood at about 50 percent, according to CME Group's FedWatch program.

The dollar index, which measures the greenback against a basket of six major rivals, was last up 0.2 percent at 93.065 after touching 92.777, the lowest since early May 2016.

"It’s all about negative dollar momentum," said Vassili Serebriakov, FX strategist at Credit Agricole in New York. "If you’re short the dollar, the move has been playing out in your favor and there is little reason to change the view."

Serebriakov said weak U.S. construction spending and auto sales added to the dollar's troubles. The Commerce Department said construction spending fell 1.3 percent in June to the lowest since September 2016. Economists polled by Reuters had expected construction spending to increase 0.4 percent.

Serebriakov also referred to weak U.S. auto sales. U.S. carmakers said Tuesday they continued to slash sales to daily rental fleets in July.

The dollar fell below 110 yen for the first time in more than six weeks, touching 109.94 yen. The dollar was last at 110.22 yen. The euro was down 0.4 percent against the dollar at $1.1797 but not far from a 2-1/2-year high of $1.1845 touched Monday.

The dollar index fell in July, its fifth consecutive monthly decline, the longest such stretch since December 2010 through April 2011. On a monthly basis, it was the biggest drop since March 2016.

"(Political) policy uncertainty in the U.S. I think has been the biggest driver of declines in the dollar recently," said Sireen Harajli, FX strategist at Mizuho in New York. "Any positive effect from the election of President Trump I think at this point has been priced out." (Reporting by Sam Forgione; additional reporting by Saikat Chatterjee in London; Editing by Steve Orlofsky)

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