Investing.com – The dollar fell against a basket of global currencies on Wednesday amid renewed political uncertainty in Washington, following President Donald Trump’s threat of a government shutdown.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell by 0.29% to 93.15.
A day after it appeared the Trump administration’s economic agenda was back on track, the dollar fell to session lows, as traders mulled over President Trump’s threats to shut down the government if he does not get funding for a wall on the U.S.-Mexico border.
"If we have to close down our government, we're building that wall," President Trump said. "We're going to have our wall. The American people voted for immigration control. We're going to get that wall."
Trump’s threat of a government shutdown, stoked U.S. political uncertainty, prompting an uptick in demand for safe-haven currencies like the yen and Swiss Franc.
USD/JPY fell 0.30% to Y108.86 while USD/CHF fell 0.9624.
The rise in safe-haven demand comes ahead of speeches by European Central Bank president Mario Draghi and Federal Reserve chair Janet Yellen at a two-day symposium of global central bankers in Jackson Hole, Wyoming, which gets underway on Thursday.
Draghi, however, is expected to remain tightlipped on future monetary policy action to avert a bullish reaction in the euro amid the central bank concerns over the sharp rise in the single currency.
Also weighing on sentiment on the greenback was a rise in the euro, following a pair of Eurozone economic reports on manufacturing and services that topped expectations.
EUR/USD rose 0.41% to $1.1809 while EUR/GBP rose 0.61%.
GBP/USD fell 0.20% to $1.2797 while USD/CAD traded roughly flat at C$1.2555.