BD Forex Analysis-The dollar slid lower against a basket of the other major currencies on Tuesday, pressured lower by a combination of geopolitical concerns and the stronger pound after British Prime Minister Theresa May called for snap elections in June.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.16% to 100.04, after rising as high as 100.31 earlier in the session.
The dollar re-approached the prior session’s five-month lows against the yen, with USD/JPY down 0.18% to 108.7.
The greenback had found some support against the Japanese currency overnight following remarks by U.S. Treasury Secretary Steven Mnuchin.
Mnuchin, in an interview in the Financial Times newspaper said that while he agreed with U.S. President Donald Trump’s view that the dollar’s strength in the short term was hurting exports, he saw a strong U.S. currency over the long term as a positive.
Last week Trump said the dollar was getting too strong, sending the dollar index to its lowest level since late March.
But the dollar struggled to make headway with investors wary as trade talks between the U.S. and Japan got underway on Tuesday.
Heightened tensions around North Korea, which has vowed to conduct more missile tests following Sunday’s failed missile launch, also continued to weigh on the greenback.
The pound erased earlier losses as investors welcomed the prospect of a June election with GBP/USD advancing 0.67% to 1.2651, the highest level since February 2.
Sterling also gained ground against the euro, with EUR/GBP falling 0.46% to 0.8430.
Meanwhile, the single currency moved higher against the dollar, with EUR/USD rising 0.21% to 1.0664.
Investors were continuing to monitor political developments ahead of the upcoming French presidential elections as the race tightened after a surge in polls for far-left candidate Jean-Luc Melenchon, who wants a referendum on the country’s European Union membership.
Investors have long since been anxious about front runner Marine Le Pen, leader of the far-right National Front party, who also wants to put the country’s EU membership to a vote and abandon the euro