* Perceived safe-haven yen rises to one-week highs
* Downbeat U.S. housing data offsets strong manufacturing
* Dollar index surrenders all of its 'Trump bump'
TOKYO, May 17 The dollar nursed its losses on
Wednesday after taking a combination of punches - solid eurozone
economic data, a fall in U.S. yields on heightened turmoil in
Washington and downbeat housing data that reduced expectations
of a Federal Reserve rate hike next month.
The dollar index, which scaled a 14-year peak of 103.82
on Jan. 3 on hopes for tax reform and stimulus measures
from the administration of U.S. President Donald Trump, gave
back all of its "Trump bump" and wallowed near its lowest levels
since Nov. 9.
The index, which tracks the U.S. currency against a basket
of six major rivals, last stood at 98.077, down slightly on the
Further pressure on the dollar followed news Trump asked his
now-dismissed FBI Director James Comey to end the agency's
investigation into ties between former White House national
security adviser Michael Flynn and Russia, according to a source
who has seen a memo written by Comey.
The memo raises questions about whether Trump tried to
interfere with a federal investigation.
"Investors need to see if he can carry out all of his
original ideas, compromise, and get organised," said Kaneo
Ogino, director at foreign exchange research firm Global-info Co
"There are still Japanese institutional investors who want
to buy the dollar on dips, but for now, they're standing back to
see what happens next, " he added.
The dollar skidded 0.5 percent to one-week lows against its
perceived safe-haven Japanese counterpart and last stood at
U.S. Treasury yields fell after data showing U.S.
homebuilding unexpectedly dropped last month, adding to a recent
spate of mixed data that has raised doubts about the U.S.
monetary policy outlook. Separate data showed U.S. manufacturing
production recorded its biggest increase in more than three
years in April.
The yield on benchmark 10-year notes fell to
2.295 percent in early Asian trade, down from its U.S. close on
Tuesday of 2.327 percent.
Interest rate futures showed the market was still in pricing
in a nearly three in four chance that the Fed will implement a
June hike, but that was down from over 80 percent a week ago,
according to the CME Group's FedWatch Tool.
The euro added 0.1 percent to $1.10965 after earlier
touching $1.1098, its highest since November.
Data on Tuesday showed the euro zone growing at 1.7 percent
year-on-year in the first quarter, in line with expectations.
(Reporting by Tokyo markets team; Editing by Eric Meijer)