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The dollar edged lower against a basket of major currencies on Friday, after reports that US President Donald Trump’s campaign team was issued with a subpoena in October led to investors taking flight from the greenback.  

People familiar with matter stated that Special Counsel Robert Mueller ordered the subpoena last month, which requested for documents and emails containing information about the possible Russian interference in the 2016 US presidential election.

The Special Counsel’s office has requested more than a dozen campaign officials for files that cite Russia-related keywords.

Sources described it as a cleanup subpoena, which was intended for gathering any missing information as well as ensuring that Mueller had the identical document that the three congressional committees have in their possession.

Following the report, the US dollar index, which measures the greenback’s strength against a host of global currencies fell 0.2 percent to $93.60.

Currency strategist Yukio Ishizuki said that demand for dollar from institutional investors was relatively strong, but selling by speculator appeared stronger, adding that it is likely they will see a choppy movement as participants try to adjust their positions before Thanksgiving Day.

USD/JPY

The dollar was down 0.4 percent to 112.53 against the yen, after hitting its lowest level since October 19 of 112.40.

The greenback recovered from a one-month low overnight as investors lost confidence, stopping the rise in global stocks, but boosted the Japanese currency.  

Forex strategist Junichi Ishikawa stated that while the drawback in equities halted recent losses in Tresury yields, focus still remains on US tax reforms.

Ishikawa also said that yields cannot climb much further when there is doubt on whether tax reforms can go through this year, adding that the pair can test the 114.00 handle, but it could come short of force for a sustained rise under such circumstances.

Other Currencies

The greenback gained 0.05 percent to 1.2763 against its Canadian counterpart, while it slipped 0.2 percent to 0.9919 against the Swiss franc.

The euro added 0.2 percent to 1.1795 against the dollar and was expected to gain 1.2 percent on the week, after it marked a one-month high of 1.1862 on Wednesday as a result of an upbeat third-quarter economic data in Germany.   

The British pound was up by 0.3 percent to 1.3245, moving itself further away from Monday’s decline of 1.3063, after UK retail sales growth figures for October came in ahead of analysts’ expectation.   

Other high-earning currencies, including the Australian dollar fell 0.5 percent to 0.7544, while the kiwi decreased 0.9 percent to 0.6787.The Aussie is also expected to end 1 percent lower on the week.    

Market strategist Greg McKenna said that the Aussie’s shortcomings are partially due to the thinning spread between the US and Australian government debt, mainly in short-term bonds as US’ two-year yields grows further.

Mckenna added that the currency will continue to perform poorly until that spread turns around or until the Aussie falls far enough to look like value, which is not possible until there is at least a 0.73 handle on it.

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