The dollar was under deep pressure on Tuesday as China's renminbi hit an eight-month high and the Australian dollar reached a two-year peak against its US counterpart.
Rising opposition to President Trump's healthcare reforms and growing market uncertainty over the pace of Federal Reserve interest rate tightening has driven the dollar to a 10-month low.
Political turbulence is increasing in the US after two Republican senators Mike Lee and Jerry Morgan said they opposed Trump's plans to repeal Obamacare.
Against a basket of its rivals, the dollar has fallen 8.4% this year and was down a further 0.3% at 94.84 on Tuesday.
"Six months in office and with no major legislation signed into law, it seems that the 'The Art of the Deal' hasn’t worked so far in US politics," said Hussein Sayed, chief market strategist at FXTM.
"With tax reforms now likely to face huge uncertainties and economic data signaling a slowing economy, it will only be a matter of time before US corporate earnings take a u-turn," he added.
China's currency climbed against the dollar in spite of renewed efforts by the People's Bank of China to guide the currency lower.
The central bank on Tuesday fixed the midpoint for the renminbi's trading range at a weaker level for the first time in five sessions.
Despite this, the dollar fell 0.2% against the renminbi to 6.7580, having earlier hit an eight-month low of 6.7569.
Aussie hits 2-year high
The Australian dollar leapt against its US counterpart after minutes from the Reserve Bank of Australia's most recent monetary policy meeting highlighted an improving economic outlook.
When discussing their opinions on appropriate levels for a neutral interest rate: one that would neither overstimulate the economy, nor hold it back, the consensus average was 3.5% – well above the current 1.5%.
The Aussie jumped 1.4% to 0.7909 versus the US dollar.
The pound was one of few currencies to weaken against the dollar after consumer price inflation dipped in June.
Falling to an annual rate of 2.6% from 2.9% in May, the data suggested the Bank of England can hold the main overnight rate at the current 0.25% for longer.
Sterling overturned earlier strength against the dollar to fall 0.2% to $1.3031.