Dollar erases gains after Trump announces council disbanding

A US five dollar note is seen in this illustration photo June 1, 2017. [Photo/Agencies]

The dollar turned lower against most major currencies on Wednesday following an exodus from and eventual disbanding of US President Donald Trump's manufacturing council and strategic policy forum.

Trump announced he was shuttering the manufacturing council after the chief executives of 3M and Campbell Soup announced they would leave it over his comments about a violent weekend rally and subsequent death of one person in Charlottesville, Virginia. A second strategic and advisory group was dismantled as well.

The dollar index DXY, which tracks the greenback against six major currencies, fell near its lows of the day following the announcement from Trump via Twitter.

"Right now it seems like (the dollar's slide) is coinciding with Trump's announcement that he's disbanding the council, another hit to administration, weighing on market sentiment and leading investors to sell more dollars because dollar has had a very difficult time extending gains ahead of the FOMC," said Kathy Lien, managing director of BK Asset Management. "The timing seems to indicate this is the primary driver."

The dollar turned negative against the yen JPY=, euro EUR= and Swiss franc CHF=, having earlier touched weekslong highs against each.

REUTERS