×

UPDATE 1-Dollar falls on ECB bets, month-end moves

* Portfolio adjustments at month's end boost euro

* Euro hits more than 2-1/2-year peak vs dollar

* Scaramucci departure clouds U.S. political outlook

* Dollar touches more than six-week low vs yen (Recasts, adds dollar performance this year)

NEW YORK, July 31 (Reuters) - The U.S. dollar hit a more than 2-1/2-year low against the euro on Monday on month-end portfolio adjustments and expectations for a more hawkish European Central Bank, and touched a more than six-week low against the yen on concerns over low U.S. inflation.

The dollar weakened further late in the day, as uncertainty over the U.S. political outlook increased after the departure of White House communications director Anthony Scaramucci, but then pared some losses.

The dollar index, which measures the greenback against a basket of six major currencies, hit its lowest since early May 2016 of 92.786 after the news of Scaramucci's departure. The dollar also hit a more than six-week low against the yen of 110.22 yen.

Doubts surrounding the likelihood of U.S. President Donald Trump realizing his pro-growth agenda, including tax reform, have hurt the dollar and contributed to the dollar index's roughly 2.9 percent decline in July.

The dollar is now down more than 9 percent so far this year, its worst performance for the first seven months of the year since 1986 when it fell 12.5 percent.

Earlier in the day, the euro was boosted as traders bought the currency as part of month-end portfolio adjustments, analysts said, and on expectations the ECB was on track to tighten monetary policy.

"Europes economy is really doing well, and as a result you should expect monetary policy over the medium term to adjust to that," said Greg Anderson, global head of foreign exchange strategy at BMO Capital Markets in New York.

Scaramucci's departure follows one of the rockiest weeks of Trump's presidency in which a major legislative effort - a healthcare overhaul - failed in Congress and both his spokesman and previous chief of staff left their jobs.

"With the confirmation of Scaramuccis departure, this is another blow to the administrations credibility," said Alfonso Esparza, senior currency analyst at Oanda in Toronto.

Concerns that low U.S. inflation could lead to a more dovish Federal Reserve also have hurt the greenback.

(Reporting by Sam Forgione, additional reporting by Megan Davies; Editing by Chris Reese and Diane Craft)