FOREX-Dollar slips vs yen, set for weekly loss due to Trump's troubles


Reuters

* Political tumult in Washington weighs on greenback
    * Dollar index poised for weekly loss of 1.5 pct
    * Brazil's real nurses losses after previous day's slide

 (Updates prices, adds comments)
    By Masayuki KitanoSINGAPORE, May 19 (Reuters) - The dollar sagged against the
yen on Friday and was on track for weekly losses, bruised by
worries that political turmoil in Washington could delay efforts
by U.S. President Donald Trump to implement his economic
stimulus plans.
    The dollar eased 0.1 percent to 111.39 yen <JPY=>, having
set a three-week low of 110.24 yen on Thursday. The dollar is
down about 1.7 percent against the yen for the week, putting it
on track for its biggest weekly fall in a month.
    The greenback had gained some reprieve on Thursday, helped
by solid U.S. economic data, including a jump in the
Philadelphia Fed's gauge of mid-Atlantic manufacturing activity
in May. [nL2N1II163]
    Focus will remain on the Trump administration's troubles
following the controversial dismissal of the Federal Bureau of
Investigation's director, James Comey, and that could continue
to weigh on the dollar, analysts said.
    "It hasn't gone away...and so the market will be swayed by
any related headlines," said Satoshi Okagawa, senior global
markets analyst for Sumitomo Mitsui Banking Corporation in
Singapore.
    Trump, striking a defiant tone on Thursday after days of
political tumult, denied colluding with Russia during his 2016
campaign or asking Comey to drop a probe into disgraced former
national security advisor Mike Flynn. [nL2N1IK0LD]
    On Wednesday, the Justice Department appointed former FBI
chief Robert Mueller on Wednesday as special counsel to probe
possible ties between Russia and Trump's 2016 presidential
campaign. [nL2N1IJ0UK]
    "I think we will get a lot more...headlines in coming weeks
and months, especially as the investigations takes place," said
Tan Teck Leng, forex analyst for UBS Wealth Management in
Singapore.  "It will be a hit sentiment for the dollar."
    Against a basket of six major currencies, the dollar held
steady at 97.797 <.DXY>.
    The dollar index, which fell to a six-month low of 97.333 on
Wednesday, is down nearly 1.5 percent for the week, putting it
on track for its biggest weekly slide since July 2016.
    The euro was last trading at $1.1112 <EUR=>, up 0.1 percent
on the day but down from a six-month high of $1.1174 set on
Thursday.
    UBS Wealth Management's Tan said the euro will probably rise
over the next several months, supported by the euro zone's
improving growth momentum. He also expected the European Central
Bank (ECB) to start signalling in June or July its intent to
begin reducing its asset-buying programme.
    Tan expected the ECB to announce in September that it will
start reducing its monthly asset purchases from January 2018.
The ECB is currently purchasing 60 billion euros a month, mostly
in bonds.
    Elsewhere, among emerging market currencies, the Brazilian
real <BRL=> <BRBY> nursed losses after slumping 8 percent on
Thursday following allegations that President Michel Temer
condoned bribes to silence a key witness in a corrpution
scandal. [nL2N1IK2T3]
    The real last stood at 3.3685 per U.S. dollar.

 (Reporting by Masayuki Kitano; Editing by Simon Cameron-Moore)
 ((masayuki.kitano@thomsonreuters.com; +65-6417-4682; Reuters
Messaging: masayuki.kitano.thomsonreuters.com@reuters.net))

Keywords: GLOBAL FOREX/ (UPDATE 1)



This article appears in: Politics , Stocks , World Markets , Economy


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