The dollar fell to its lowest since November against a basket of currencies on Monday as investors lost confidence in prospects for a U.S. fiscal spending boost under President Donald Trump after his failure to pass a major healthcare reform bill.
Trump's inability to deliver on his campaign pledge to overhaul the nation's healthcare system marked a big setback for a Republican president whose own party controls Congress, and raised doubts over whether he will be able to see through tax reforms and a proposed spike in spending.
The dollar was down 0.65 percent on the day against the basket of major currencies used to measure its broader strength .DXY. It fell as low as 98.858, the lowest since Nov. 11.
"The assumption was that if you can’t get healthcare done that some of the other things on his agenda, mainly the tax reform, would be a harder sell," said John Doyle, director of markets at Tempus Inc in Washington.
The reduced expectations for Trump's reflationary tax and spending proposals also sent equities lower, with the U.S. S&P 500 .SPX down 0.75 percent.
The dollar index had risen to a 14-year high near 104.00 in early January when expectations for inflation-boosting stimulus under the Trump presidency were at their peak, with investors betting big on the so-called "Trumpflation" trade. [Read more... http://snip.ly/h7izc ]