The dollar started the week on the back foot yesterday, after U.S. data showed a smaller-than-expected rise in wages in January that reinforced expectations the Federal Reserve will refrain from raising interest rates next month.
The dollar index, which tracks the greenback against a basket of six major rivals, drooped 0.2 percent to 99.688, moving back toward last Thursday's low of 99.233, which was its weakest since mid-November.
The U.S. currency slipped 0.2 percent against the yen from Friday's late North American levels to 112.36 yen, retreating toward last week's late-November low of 112.05. The Turkish lira rose to a four-week high against the U.S. dollar yesterday.
The dollar began the day by losing ground against the lira with the exchange rate decreasing by 0.67 percent to reach 3.6702.
The exchange rate had hovered between 3.71 and 3.69 over the past two days and started trading at 3.6950 as of 9 a.m. (0600GMT) Monday morning.
Analysts say the decline in the dollar index may continue in the coming days and that the exchange rate could fall further down to 3.60 during the week.
The Turkish lira has lost more than 20 percent of its value against the greenback since last November, with the parity rate reaching as high as 3.8950 on Jan. 10.
The U.S. dollar has been steadily gaining value against the Turkish lira since mid-August.
While the headline figure of Friday's nonfarm payrolls report for January showed a greater-than-expected rise in job growth, the unemployment rate edged up and wage growth was disappointing. That implied inflation would not attain a pace that would prompt the U.S. central bank to raise interest rates soon.
Adding to the smaller-than-expected rise in U.S. wage growth, concerns about the potential impact of Trump's policies also dampened the dollar's outlook. Investors fretted that his protectionist trade policies and statements about other countries' currency manipulations would offset any dollar lift from his stimulus policies and deregulation.
Speaking to Rishaad Salaat on "Bloomberg Markets," Dominic Schnider, head of commodities and Asia-Pacific foreign exhange at UBS Wealth Management CIO Office, discussed the U.S. dollar, said that they think that the U.S. dollar will further weaken throughout 2017.
One of the main rationales is dollar raised with the Trump euphoria now it is clearly now starting to be priced out, he said. He indicated that the Fed is likely to introduce two hikes this year, emphatically saying no more than two hikes.
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