Forex - Dollar edges up after slipping on US political concerns

© Reuters. Dollar edges up after slipping on U.S. political concerns

Investing.com - The dollar edged higher against a basket of the other major currencies on Thursday, regaining ground after slipping in the previous session amid renewed concerns over U.S. political uncertainty.

The , which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.14% to 93.27 by 03:22 AM ET (07:22 GMT).

U.S. President Donald Trump threatened Tuesday to to secure funding to build a wall along the U.S.-Mexican border. He also raised the prospect of pulling out of the North American Free Trade Agreement with Mexico and Canada.

The greenback has weakened recent sessions amid renewed investor concerns about the Trump administration's ability to deliver on its economic policy agenda.

Persistent doubts about the prospects for a third interest rate hike by the Federal Reserve this year have also fed into dollar weakness.

Lower rates typically weigh on the dollar by making U.S. assets less attractive to yield-seeking investors.

Market participants were awaiting comments from Fed Chair Janet Yellen at the annual central banking conference in on Friday for clues on how policymakers view the economy. Some investors believe Yellen may make the case for a third rate hike this year.

The dollar was higher against the yen, with rising 0.25% to 109.29 after ending Wednesday’s session down 0.61%.

The euro was a touch lower, with dipping 0.11% to 1.1794. The single currency was boosted on Wednesday after private sector survey data indicated that the recovery in the euro area remains solid.

Market watchers were looking ahead to a speech by European Central Bank President Mario Draghi in Jackson Hole on Friday.

Draghi was not widely expected to deliver any new policy message in his speech, despite speculation over how soon the central bank plans to start scaling back its stimulus program.

The euro was trading near 10-month highs against the broadly weaker sterling, with last at 0.9216, holding just below Wednesday’s highs of 0.9235.

The pound was little changed against the greenback, with at 1.2791.

Sterling has been pressured lower by growing expectations that the Bank of England will keep interest rates on hold in the coming months amid concerns over the economic impact from Brexit.

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