(Updates prices, adds comments; changes byline, dateline, pvs
* Dollar sinks to 5-week low below 114 yen
* Broader dollar index heading for worst week since early
* Mexican peso rebounds from record low vs dollar
* Graphic: World FX rates in 2017 tmsnrt.rs/2egbfVh
By Sam Forgione
NEW YORK, Jan 12 The U.S. dollar hit its lowest
level in five weeks against a basket of major currencies on
Thursday and was on course for its worst week since November,
hit by a loss of confidence in the U.S. reflation trade a day
after a news conference by U.S. President-elect Donald Trump.
Speculators had driven the dollar index, which measures the
greenback against a basket of six major currencies, to a
one-week high Wednesday in anticipation that Trump's first news
conference since his Nov. 8 victory would give more detail on
new fiscal spending and tax measures to repatriate U.S.
corporate capital held overseas.
Instead, the event was dominated by debate over Russian
hacking and unsubstantiated claims that he had been caught in a
compromising position in Moscow. The dollar index tumbled to
100.720 Thursday after touching, its weakest since Dec. 8 after
touching 102.950 before the news conference Wednesday.
"Mr. Trump disappointed in not providing deeper details on
his policy platform," said Joe Manimbo, senior market analyst
with Western Union Business Solutions in Washington.
The dollar index had gained 4 percent between Trump's
election victory and Wednesday on expectations that his promised
policies would boost inflation and encourage the Federal Reserve
to raise interest rates. The index is on track to fall 1.3
percent this week to mark its worst week since that ended Nov.
The dollar weakened as much as 1.4 percent against the yen
to 113.76 yen, its weakest level in five weeks, while the
euro hit its highest in five weeks against the dollar of $1.0684
. Sterling hit a six-day high against the dollar
of $1.2317, rebounding from a three-month low of $1.2038 touched
Wednesday before Trump's news conference.
Even the Mexican peso rebounded against the greenback. The
dollar was last down 0.7 percent against the peso at 21.7075
pesos. The peso broke the 22 peso-per-dollar mark for the first
time on Wednesday and hit a record low of 22.0440 pesos
after Trump said U.S. auto companies would face a high
tax for products made south of the border during the press
Analysts said it was unclear how long the dollar weakness
"For the moment, I would stop short of drawing broader
conclusions. I think (Trump) will still implement his policy
platform," said Lee Hardman, a currency economist with Japan's
MUFG in London.
(Reporting by Sam Forgione; Additional reporting by Patrick
Graham in London; Editing by Bill Trott)