Dollar sinks to 7-week low on Trump uncertainty

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The dollar fell to a seven-week low against a currency basket on Monday, weighed by concerns about the early days of U.S. President Donald Trump's administration that have so far been marred by protests, a protectionist inauguration speech and angry comments on Twitter.

The safe-haven yen has been the main beneficiary of U.S. political uncertainty, rising for a second straight session against the dollar. The has gained nearly 3 percent since the start of the year.

Has the dollar lost steam?

Trump's "America first" message was followed over the weekend by coordinated protests in U.S. cities, testy exchanges between members of his top staff and media and confirmation that key trade pacts were heading for the shredder.

In early afternoon trade, the , which measures the greenback against six major rivals, fell 0.6 percent to 100.14 led by a 1.46 percent drop versus the yen to 112.93 yen.

"The new Trump administration did little to reassure nervous investors that the direction of the government will be more towards growing the economy and less toward the divisive and protectionist rhetoric that characterized much of the campaign period," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington.

Trump said he would begin renegotiating the North American Free Trade Agreement and withdraw from the Trans-Pacific Partnership (TPP).

That, and the declaration of a "running war" with parts of the media, fed uncertainty about the direction policy will take and pointed to a bumpy few months ahead for the new president.

The dollar index rose around 4.2 percent between Trump's election in November and the end of last year, but has since given back more than 2.5 percent.

The dollar's steep rally following Trump's victory was spurred by expectations that the new administration would focus on pro-growth fiscal stimulus, tax cuts, and regulatory reform that would likely lift inflation and prompt the Federal Reserve to raise interest rates more quickly this year.

Sterling Climbs

Pro: People will pile back into long dollar trade after inauguration

Sterling was the other big gainer, hitting a five-week high as investors bet Britain's Supreme Court would rule on Tuesday that the government needs parliamentary approval to trigger formal Brexit talks.

It climbed as high as $1.2496, and pushed its way towards a two-week high against the euro at 86.20 pence per euro.

The euro was up 0.45 percent at $1.0747, on course for its seventh daily rise in the last nine.