Dollar takes a dive as hopes for growth falter

The dollar hit its lowest level since Donald Trump claimed the White House today amid mounting caution over prospects for the US economy.

Against a basket of currencies, the greenback hit its lowest since November 9 as a cocktail of concerns clouded the outlook for traders.

Investors were already jittery after surprisingly weak US jobs figures showed the world’s largest economy adding a disappointing 138,000 jobs last month.

Although the US Federal Reserve hiked rates in March this year and is virtually certain to raise them again next week, growth hopes have been tempered.

Simon Derrick, currency analyst at BNY Mellon, said the currency’s weakness was down to doubts over whether the Fed follows through with a third predicted interest rate rise later this year.

He added: “It is a moderating of expectations. Clearly last November there was a lot of talk about infrastructure spending... but now we seem to have gone back to pre-election thinking.”

Other short-term clouds over the dollar include Thursday’s looming meeting of the European Central Bank, at which president Mario Draghi could give hawkish signals over removing stimulus as the eurozone’s economy shows signs of recovery.

On the same day James Comey — sacked as FBI director by Trump last month — gives testimony to a Senate committee while the UK goes to the polls in an election now seen as much tighter than at the start of the campaign in April.