Investing.com - The dollar ended lower on Friday as investors weighed concerns over heightened political uncertainty in the U.S. against growing optimism that U.S. Senate Republicans would be able to pass a tax overhaul bill.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.17% to 92.81 in late trade after going as low as 92.55 earlier.
The dollar came under pressure following reports that former national security adviser Michael Flynn is prepared to cooperate the special counsel probe into alleged links between the Trump campaign and Russia during last year’s election.
Flynn pleaded guilty Friday morning to lying to the Federal Bureau of Investigation about his communications with the Russian ambassador to the U.S. in December 2016.
The index later pared some of its losses after Senate Majority Leader Mitch McConnell said Republicans had the votes to pass a sweeping tax-overhaul bill after last-minute negotiations to address concerns about the bill’s impact on the federal deficit, healthcare and property taxes.
The Trump administration has said its tax cuts will generate growth and spark inflation, which investors hope will prompt a faster pace of monetary tightening by the Federal Reserve.
The dollar was lower against the yen, late Friday, with USD/JPY down 0.3% to 112.18.
The dollar was also lower against the traditional safe haven Swiss franc, with USD/CHF falling 0.73% to 0.9762.
The yen and the Swiss franc are often sought by investors in times of market uncertainty.
The euro was little changed against the dollar late Friday, with EUR/USD at 1.1896.
Sterling retreated from two-month highs, with GBP/USD down 0.42% to 1.3471 as concerns over progress in Brexit negotiations offset stronger-than-forecast UK manufacturing data.
Elsewhere, the Canadian dollar jumped to one-week highs, with USD/CAD falling 1.64% to 1.2683 in late trade after solid Canadian jobs data boosted expectations for further rate hikes by the country’s central bank in 2018.
In the week ahead, investors will be continuing to focus on U.S. political developments. Economic data will also be in the spotlight, with market watchers looking ahead to Friday’s U.S. nonfarm payrolls report for November.
Interest rate reviews in Australia and Canada will also be closely watched.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, December 4
Australia is to report on company profits.
The UK is to publish data on construction sector activity.