US Dollar Stabilizes Against Major Peers as Trump Woes Diminish

The US dollar was little changed on Thursday after maintaining most of the losses it had over the past two days amid higher uncertainty about the prospects of Donald Trump’s economic agenda. A series of political developments this week left the US president in a difficult position, which weighed on the greenback, but the currency limited its decline as positive economic data eased traders’ concerns.

The latest controversy to surround Trump came in the wake of his sudden decision to fire Federal Bureau of Investigation Director James Comey last week. Reports surfaced that the president had privately asked Comey to stop investigating the ties his former Security Advisor Michael Flynn may have had with Russia. These reports emerged a single day after Trump gave sensitive intelligence to Russian officials.

Today, the president used his private Twitter account to call the ongoing developments the single greatest witch hunt in American history. Trump then proceeded to compare his own actions to what he titled as illegal acts done by Hillary Clinton and Barack Obama. The latest tweets were perceived as an attempt by the president to play the victim card ahead of Comey’s appearance before the Senate Intelligence Committee, which will be investigating the matter.

The market’s focus switched to positive economic data today as traders await more updates on the ongoing political turmoil. The Federal Reserve Bank of Philadelphia said that its index for manufacturing activity in the Philadelphia region rose to 38.8 in May from 22.0 in April, which marked the 10th consecutive month of gains. The reading also beat estimates of 19.5, but remained below a strong reading in February’s at 43.3.

The bank added that 51% of firms reported an increased activity in May, while 13% reported a decline, as new orders lost 2 points despite a gain of 16 points for the shipments index. Another subindex that tracks manufacturing employment lost 3 points in the current month but remained positive for 6 months in a row.

Meanwhile, the Department of Labor updated the weekly number of initial jobless claims earlier today. 232,000 Americans applied for unemployment benefits in the week ended May 13, from 236,000 the previous week, while the moving average for four weeks decreased 2,750 to 240,750. Analysts expected 240,000 jobless claims in the same week.

EUR/USD traded at 1.1127 at 16:35 GMT on Thursday from 1.1168 at 01:00 GMT, the pair’s highest level since November 9, when Trump won the US presidential election. EUR/USD started the day at 1.1157.

The Dollar Index, which tracks the performance of the US currency against a basket of its major peers, was at 97.59 as of 16:30 GMT today from 97.57 yesterday.

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