The dollar fell Friday to a 32-month low against the euro in Asian trading—the euro nearly topping $1.21—while it hit another 10-month low versus the yen, at ¥107.62. That compares with around $1.1865 and ¥110.25 at the end of last week.
A litany of factors is putting fresh pressure on the dollar. Doubts that the Federal Reserve has the firepower, or the will, to raise interest rates again this year, given soft inflation, only grew when the country’s fourth-largest city was flooded by a massive hurricane—and with the prospect of an even-stronger storm cutting through the length of Florida, the country’s third-biggest state by population.
Given the economic devastation left by Hurricane Harvey in Texas and the potential for more from Irma in Florida, a rate increase in the near term would be “politically incorrect,” said Stephen Innes, head of trading in Asia at forex broker Oanda in Singapore.