The dollar weakened for a fifth day as traders digested disappointing US housing data against a backdrop of a fresh controversy engulfing President Donald Trump. US stock futures advanced amid earnings.
The greenback fell against most of its major peers after a report the president shared terrorism intelligence with Russian officials, an action he has since defended. An unexpected decline in US new-home construction lent momentum to the drop. The euro jumped as hedge funds and macro investors were said to have taken long positions. Crude rose a fifth day as Goldman Sachs Group Inc. said other countries are likely to join Saudi Arabia and Russia’s proposal to extend output cuts.
The most recent in a string of negative events that have dogged Trump’s administration will likely add to doubts about his ability to deliver on plans to boost infrastructure spending and cut taxes. That could prove key to investors, who are weighing historically pricey equities and ominously low volatility just as data from both China and the US casts a shadow on global growth.
“This sort of discussion is very new indeed and has caused a lot of US politicians to raise more concerns, and that has clearly rippled into the markets,” said Andrew Milligan, head of global strategy at Standard Life Investments Ltd. in Edinburgh.
“We can still buy into the interest-rate differentials arguments for the dollar but the arguments about fiscal stimulus and cross-border flows look more tenuous and have made us neutralize our bets on the dollar.”
OPEC’s internal Economic Commission Board meets in Vienna on Wednesday to discuss the market in preparation for the group’s formal meeting on May 25. Wednesday’s UK labor report may reveal pay rose 2.1 percent, down from 2.2 percent. Singapore exports and Malaysia CPI for April are also due on Wednesday, and the Australian jobs report a day later. Japanese GDP for the first quarter will be out on Thursday.