The dollar pulled back up from its lowest level in over a year on Monday, aided by better-than-expected data on the U.S. economy, as forex investors kept a wary eye on developments concerning possible ties between Russia and aides to U.S. President Donald Trump.
The dollar bounced up from a 13-month trough against a basket of six major currencies touched in early trading. EUR/USD traded below 1.1640 while USD/JPY closed above 111.10.
Jared Kushner, Trump's son-in-law and senior advisor, told Senate investigators on Monday he had met with Russian officials four times last year but said he did not collude with Moscow to influence the 2016 U.S. election.
The ongoing probes into the Russia matter by congressional panels and a Justice Department special counsel, as well as weak U.S. economic data and reduced inflation expectations, have weighed on the dollar for much of the month. Market participants say the investigations have been one factor slowing progress on pushing through Trump's pro-growth agenda of tax cuts and infrastructure spending.
Official data from the Commodity Futures Trading Commission data show bets on the dollar are now net short, for the first time in over a year.
On Monday, Markit's manufacturing and services flash surveys both showed the U.S. economy beating expectations.
