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[NEW YORK] The US dollar fell against a basket of major currencies on Thursday on a perceived lack of progress on US tax reform, while Wednesday's more dovish-than-expected Federal Reserve meeting minutes continued to weigh on the greenback.
The US dollar fell as much as 0.6 per cent against the yen to a two-week low of 112.55 yen, while the euro rose as much as 0.4 per cent against the US dollar to US$1.0595.
Concerns over politics on both sides of the Atlantic helped the safe-haven yen, with anti-EU French presidential candidate Marine Le Pen's campaign and US President Donald Trump's policy timeline stoking demand for the Japanese currency.
New US Treasury Secretary Steven Mnuchin told Fox Business Network that any policy steps the Trump administration takes would likely have a limited impact this year and told CNBC that he wanted to see tax reform passed before Congress' August recess.
That was in line with comments by other politicians over the past month, but seemed to some investors to dial back Mr Trump's own recent promises.
"Most people were hoping that these policy changes would be enacted fairly quickly," said Jason Leinwand, founder and chief executive of FirstLine FX in Randolph, New Jersey. "The market is starting to realise it's not going to happen as soon as expected."
Concerns over the strength of far right leader Marine Le Pen in the French presidential election campaign pushed the euro lower against currencies other than the US dollar, including the yen, said Richard Scalone, co-head of foreign exchange at TJM Brokerage in Chicago.
A poll showed Le Pen was only 10 points behind conservative Francois Fillon but 22 points behind centrist Emmanuel Macron in the potential second-round run-offs.
Wednesday's Fed minutes, which showed that there was less urgency among voting members to raise interest rates, also kept the US dollar depressed against its major rivals. "People were expecting slightly more hawkish minutes yesterday," Mr Scalone of TJM Brokerage said.
Fed funds futures on Thursday implied traders saw just a 22.1 per cent probability that the Fed would hike rates in March, up from Wednesday's 17.7 per cent probability but still low, data from CME Group's FedWatch showed.
The dollar index, which measures the greenback against a basket of six major currencies, was last down 0.2 per cent at 101.010. The US dollar fell as much as 1.5 per cent against the Mexican peso to 19.6108 pesos, the lowest since the day following Mr Trump's election victory on Nov 8.