The dollar slid to its lowest level in two weeks against a currency basket on Wednesday as investors remained cautious with growing political risk in the U.S. along with U.S. - China trade talks and Federal Reserve minutes in focus.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was down 0.17% to 94.97 by 09:47 AM ET (13:48 GMT) after hitting a low of 94.83 earlier, the weakest level since August 8.
Market sentiment was hit by concerns over U.S. President Donald Trump’s standing after his former personal layer Michael Cohen admitted he made illegal campaign contributions at the instruction of then-candidate Trump.
At the same time, Trump campaign chairman Paul Manafort was convicted on criminal counts in the first trial to come as a result of special counsel Robert Mueller's Russia probe.
The dollar had already come under pressure earlier in the week after Trump said Monday that he was "not thrilled" with Fed Chairman Jerome Powell for raising interest rates.
The Fed has been hiking rates and is expected to continue doing so, with another two increases expected this year.
The Fed was to publish the minutes of its August meeting later in the day, with investors on the lookout for any tweaks to its outlook on inflation, the economy and trade war fears.
On Friday, Powell is to make his first appearance as Fed chairman at the annual economic symposium in Jackson Hole.
Market sentiment had been boosted by the revival of trade talks between Washington and Beijing.
Investors hope the talks will ease trade tensions between the world’s two largest economies, even after Trump played down the prospects of any imminent success.
The euro rose to two-week highs against the softer dollar, with EUR/USD rising 0.26% to 1.1600.
The single currency has rebounded since plumbing 13-month lows against the dollar last week amid fears over contagion effects on European banks from Turkey’s currency crisis.
The dollar edged higher against the yen, with USD/JPY rising 0.14% to 110.39 from an overnight low of 110.02.
The pound gained ground, with GBP/USD adding on 0.2% to trade at 1.2920, recovering from an earlier dip.
