Forex – Dollar Rebounds, On Track for Best Month since February

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© Reuters.  Dollar rebounds, on track for best month since February© Reuters. Dollar rebounds, on track for best month since February

Investing.com – The dollar regained ground on Tuesday as investors shrugged off news that investigators probing Russian interference in the U.S. election charged President Donald Trump’s former campaign manager.

USD/JPY was up 0.24% to 113.44 by 09:19 AM ET (01:19 PM GMT) after falling to a more than one-week low of 112.96 overnight.

The dollar had come under pressure after former Trump campaign manager Paul Manafort was charged with money laundering by federal investigators.

Special Counsel Robert Mueller has also been investigating whether Trump obstructed justice in his firing of FBI Director James Comey.

Investors fear that the charges would divert Trump’s attention from his legislative agenda, which includes tax reforms.

Investors were looking ahead to the Federal Reserve’s latest monetary policy statement on Wednesday for fresh indication on the path of rate hikes this year and Friday’s U.S. jobs report for October.

Trump is also expected to name his pick for the next head of the U.S. central bank on Thursday. Recent reports have indicated that Trump is likely to appoint Fed Governor Jerome Powell, who is viewed as more dovish than other candidates.

The yen showed little reaction on Tuesday after the Bank of Japan kept monetary policy on hold in a widely anticipated decision.

The euro was a touch lower, with EUR/USD at 1.1639.

The single currency brushed off data showing that the annual rate of inflation in the euro zone slowed to 1.4% in October.

Separate reports showed that the euro area economy posted its fastest annual growth rate since the beginning of the debt crisis in the third quarter, boosted in part by strong growth in France.

Meanwhile, the unemployment rate in the region fell to 8.9% in September, the lowest reading since early 2009.

Sterling was higher, with GBP/USD up 0.28% amid expectations that the Bank of England will raise interest rates for the first time in almost a decade on Thursday.

The greenback gained ground against the Canadian dollar, with USD/CAD adding 0.48% to 1.2895 after data showing that the country’s economy unexpectedly contracted 0.1% in August.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.15% for the day to 94.51 and was on track for its largest monthly gain since February with a gain of 1.74%.

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