U.S. Dollar Falls On Trump Policy Worries

The U.S. dollar slipped against its major counterparts in the Asian session on Monday, in tandem with falling U.S. treasury yields, as U.S. President Donald Trump's failure to get enough support on a healthcare reform raised questions about his ability to push through tax cuts and fiscal spending to boost the economy.

The benchmark yield on 2-year note declined 1.23 percent, while that of 10-year equivalent was down by 2.35 percent. Yields move inversely to bond prices.

House Republican leaders on Friday decided to withdraw Trump's healthcare bill intended to repeal and replace Obamacare amid indications of a lack of support. Failure of the Trumpcare bill sparked concerns on the ability of the Trump administration to pass further fiscal reforms, which includes tax cuts and infrastructure spending.

With today's economic calendar being empty, investors focus on speeches from Federal Reserve Bank of Chicago President Charles Evans and Dallas Fed President Robert Kaplan later in the day for more clues about U.S. monetary policy.

The greenback was modestly higher against its major counterparts on Friday, with the exception of the euro.

The greenback dropped to 1.2551 against the pound, its weakest since February 24. If the greenback extends decline, 1.265 is possibly seen as its next support level.

The greenback slipped to 110.15 against the Japanese yen, a level unseen since November 2016. Continuation of the greenback's downtrend may see it challenging support around the 108.00 region.

The greenback weakened to near a 4-month low of 1.0869 against the euro and a 4-1/2-month low of 0.9841 against the Swiss franc, compared to last week's closing values of 1.0796 and 0.9913,respectively. The greenback is poised to locate support around 1.10 against the euro and 0.97 against the franc.

The greenback fell to a 5-day low of 0.7057 against the kiwi and a 4-day low of 1.3323 versus the loonie, from last week's closing quotes of 0.7028 and 1.3378, respectively. Further weakness may take the greenback to support levels of around 0.72 against the kiwi and 1.32 against the loonie.

Looking ahead, the German Ifo business climate index for March is due to be released at 4:00 am ET.

At 1:15 pm ET, Federal Reserve Bank of Chicago President Charles Evans and European Central Bank Chief Economist Peter Praet are expected to speak about the current economic conditions and monetary policy at the Global Interdependence Center, in Madrid.