Dollar dips on Mnuchin tax comments, Fed expectations

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 dollar fell as much as 0.6 percent against the yen to a two-week low of 112.55 yen JPY=, while the euro rose as much as 0.4 percent against the dollar to $1.0595 EUR=.

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 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 realize it’s not going to happen as soon as expected."

Wednesday's Fed minutes, which showed that there was less urgency among voting members to raise interest rates, also kept the dollar depressed against its major rivals.

"People were expecting slightly more hawkish minutes yesterday," Scalone of TJM Brokerage said.