The dollar was on the back foot against its main rivals on Tuesday (31 January), remaining on track for its worst January since 2008, as traders grew increasingly uneasy with a host of executive orders signed by US President Donald Trump.

The dollar index – which measures the strength of the greenback against a basket of worldwide currencies – has fallen 1.9% so far this month. By early afternoon, the dollar was flat against the pound but declined 0.45% against the yen, trading at ¥113.26, and declining 0.38% against the Swiss franc to CHF0.9915.

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The greenback was also lower against its Canadian and Australian counterparts, falling 0.39% against the former and 0.14% against the latter, to trade at CAD$1.3075 and AUD$1.3199 respectively.

"The dollar continues to remain under pressure over concerns about the new US President's policy mix," said Michael Hewson, chief market analyst at CMC Markets.

"Traders are now in wait and see mode as the Fed starts its two day meeting with the latest statement of the US economy likely to be examined closely for clues as to the next move for interest rate policy.

Elsewhere, the euro surged against the dollar, climbing 0.60% to $1.0759 after Peter Navarro, the head of Donald Trump's new National Trade Council, claimed Germany was using a "grossly undervalued" euro to exploit the US and its EU partners.

"A big obstacle to viewing Transatlantic Trade and Investment Partnership as a bilateral deal is Germany, which continues to exploit other countries in the EU as well as the US with an 'implicit Deutsche Mark' that is grossly undervalued," he told the Financial Times.

"The German structural imbalance in trade with the rest of the EU and the US underscores the economic heterogeneity [diversity] within the EU – ergo, this is a multilateral deal in bilateral dress."

Meanwhile, the pound fell sharply against the year, after the latest Bank of England lending figures showed consumer credit growth slowed markedly in December. The report was the latest indication household spending appetite is waning after recent data confirmed retail sales fell sharply last month.

Sterling was 0.52% lower against the euro at €1.1608 and was broadly flat against the dollar, trading at $1.2484.

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