U.S. Dollar Slides As Trump Worries Deepen

The U.S. dollar declined against its major counterparts in the Asian session on Wednesday, as news of U.S. President Donald Trump meddling with the Federal Bureau of Investigation's probe on his former National Security Advisor Micheal Flynn deepened the political turmoil in Washington.

Trump asked the former FBI director James Comey to end the federal investigation pertaining to his former national security adviser, Michael Flynn, in an Oval Office meeting in February, accordion to The New York Times.

Concerns grew after U.S. Rep. Jason Chaffetz, chairman of the House Oversight and Government Reform Committee, responded to the news by demanding the FBI to turn over "all memoranda, notes, summaries and recordings" of discussions between Trump and Comey.

The news came on the heels of an earlier report that the U.S. President shared terrorism intelligence with Russian officials, an action he has since defended.

The latest developments intensified worries over the Trump's ability to make progress on issues such as tax reform and deregulation.

The greenback had been already weighed by recent run of downbeat data, which dampened expectations for faster rate-tightening cycle by the Federal Reserve.

With the the day's economic calendar being light, investors await the weekly jobless claims on Thursday for more clues about the health of the labor market.

The currency fell against its major rivals on Tuesday, after a news that U.S. President Donald Trump had revealed "highly classified information" about a planned Islamic State Operation to two top Russian officials last week.

The greenback that closed yesterday's trading at 0.9858 against the Swiss franc fell to near a 2-month low of 0.9820. The next possible downside target for the greenback is seen around the 0.97 area.

The greenback slid to 1.1119 against euro, its weakest since November 2016. Continuation of the greenback's downtrend may see it challenging support around the 1.13 region.

Reversing from an early high of 113.12 against the Japanese yen, the greenback fell to near a 2-week low of 112.28. If the greenback-yen pair extends slide, 110.00 is likely seen as its next support level.

Figures from the Ministry of Economy, Trade and Industry showed that Japan's industrial production declined less than initially estimated in March.

Industrial production fell 1.9 percent month-over-month in March instead of a 2.1 percent decrease reported earlier. In February, production had risen 3.2 percent.

The greenback slipped to a 2-day low of 0.7444 against the aussie and a weekly low of 0.6928 against the kiwi, off its early highs of 0.7411 and 0.6880, respectively. Further weakness may take the greenback to support levels of around 0.76 against the aussie and 0.72 against the kiwi.

The greenback pared gains to 1.3579 against the loonie, from an early high of 1.3618. The greenback is poised to target support around the 1.32 level.

On the flip side, the greenback edged up to 1.2906 against the pound, from a low of 1.2941 hit at 11:30 pm ET. On the upside, 1.27 is possibly seen as the next resistance level for the greenback.

Looking ahead, U.K. claimant count rate for April and ILO jobless rate for the three months to March, Eurozone construction output for March and final consumer price inflation for April are due in the European session.

At 8:30 am ET, Canada manufacturing sales for March are set for release.