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Forex - Dollar struggles near 7-week lows on Trump uncertainty

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Investing.com - The dollar was trading close to seven-week lows against a basket of the other major currencies on Tuesday, as concerns over President Donald Trump's protectionist policies continued to dominate market sentiment.

The U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, was up 0.14% at 100.09, after falling to 99.88 overnight, its lowest since December 8.

The weakness in the dollar reflected concerns over a lack of clarity on Trump's economic policies and fears that his protectionist stance could hit corporate profits and act as a drag on growth.

On Monday, Trump formally withdrew the U.S. from the Trans-Pacific Partnership trade accord, distancing America from its Asian allies.

He has also said he intends to renegotiate the North American Free Trade Agreement between the U.S., Canada and Mexico, in order to better serve U.S. interests.

The dollar pushed higher against the yen, with USD/JPY rising 0.48% to 113.22, after falling to an overnight low of 112.53.

The euro was slightly lower, with EUR/USD dipping 0.1% to 1.0756.

In the euro zone, survey data on Tuesday showed that business activity got off to a solid start to the year, with employment rising at the fastest rate since 2008.

The pound was lower, with GBP/USD down 0.34% to 1.2488.

Sterling retreated as a British Supreme Court ruling that the government will need parliamentary approval before triggering the process the exit the European Union looked unlikely to hamper Prime Minister Theresa May's plans.

Meanwhile, U.S. data showed that while manufacturing got off to a good start in 2017, existing home sales in the U.S. fell more than expected in December.

The Markit manufacturing purchasing managers' index for January came in at 55.1, ahead of expectations for 54.5 and up from December's final figure of 54.3.

In a separate report, the National Association of Realtors said existing home sales fell 2.8% to an annual rate of 5.49 million units, compared to forecasts of a 1.1% decline to 5.52 million.

But overall sales for 2016 rose to 5.45 million, the highest since 2006, from 5.25 million the previous year.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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