Dollar started the week on the back foot in early Asian trade on Monday. Euro edged up to its highest in more than a month as investors locked in gains on the dollar’s recent rise as they waited for U.S. President Donald Trump to offer details of his promised stimulus.
The euro firmed 0.2 percent on the day to $1.07270 after rising to $1.07300, its highest since Dec. 8.
That helped push down the dollar index down 0.2 percent on the day to 100.52.
Against the perceived safe-haven yen, the dollar slumped 0.7 percent to 113.83, moving back toward its edging towards last week’s seven-week nadir of 112.57 yen.
Trump’s first address as president on Friday highlighted his “America first” policies that were short on specific proposals, and disappointed investors hoping for details on his plans to stoke growth, spend on infrastructure and reduce taxes.
His inauguration was followed a day later by coordinated protests in U.S. cities that attracted hundreds of thousands of demonstrators.
Trump said on Sunday he plans to hold talks soon with the leaders of Canada and Mexico to begin renegotiating the North American Free Trade Agreement, and his administration has also said it intends to withdraw from the Trans-Pacific Partnership (TPP) trade pact.
“Trump hasn’t said anything new and hasn’t done anything yet, so people wait and see,” said Kaneo Ogino, director at foreign exchange research firm Global-info Co in Tokyo. “We have to see what kind of policies he actually follows.”
Asian forex trading this week is likely to be subdued as some investors prepare for the long Lunar New Year holiday, he added.
Data from the Commodity Futures Trading Commission released on Friday and calculations by Reuters showed that speculators reduced long bets on the U.S. dollar for a second straight week through Jan. 17.
After a sharp rally following Trump’s November election that propelled it 3 percent higher for the month, the dollar gave up some of those gains against a backdrop of uncertainty surrounding the new president’s policies.
“When Donald Trump won the U.S. presidential election, markets were thrilled at the victory and its clearing of a path to fiscal stimulus alongside transformative tax, trade and infrastructure policies,” Morgan Stanley strategists said in a note.
“As Trump took the oath of office, we transitioned from the thrill of victory to the difficulty of governing,” they said.
A Reuters poll published on Monday showed Japanese companies believe that neither Trump nor Japanese Prime Minister Shinzo Abe want to see the yen weaken significantly, a development they worry could spark an unwelcome political backlash.
In the monthly poll of 531 big and mid-sized companies 73 percent of respondents said Trump would not tolerate the dollar rising beyond 120 yen, and 90 percent saw 125 yen as a red line.