The dollar fell broadly on Wednesday, sliding to two-week lows against the yen and a one-week trough versus the euro amid growing political tension in Washington.
The greenback in May was on track to post its worst monthly performance against the euro in more than a year, even as the European Central Bank committed to keep its stimulus plan in the region.
Against a basket of six major currencies, the dollar was set to finish the month on a negative note as well, notching its largest monthly percentage loss since January.
"The dollar remains pressured by the mounting dysfunction in Washington that has all but eliminated hopes for a bold fiscal stimulus package from the Trump administration," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington.
President Donald Trump's administration has been the focus of independent investigations by the Federal Bureau of Investigation and several congressional panels over alleged Russian meddling in the 2016 presidential election and potential collusion by the Trump campaign.
U.S. economic data on Wednesday was mixed.
Pending home sales fell for a second straight month in April, hindered by a lack of supply, while an index of U.S. Midwest manufacturing activity rose in May.
These reports have little bearing on expectations for next month's expected tightening by the Federal Reserve, although the number of hikes this year is still up for debate.
The focus will be on Friday's U.S. non-farm payrolls report, which could set the dollar's tone in the short term. A Reuters poll showed Wall Street economists forecasting 185,000 new jobs this month.
Britain's pound, meanwhile, recovered from a half a percent drop on Wednesday after a poll showed the country's ruling Conservative party still in the lead, overriding a previous projection of a hung parliament in elections next week.
In late morning trade, the dollar was down 0.2 percent at 110.51 yen after earlier falling to two-week lows <JPY=>
The euro was up 0.6 percent at $1.1247 <EURO=>, while the dollar index fell to 96.98.
Sterling, on the other hand, was up 0.4 percent at $1.2913 <GBP=>, recovering from a low of $1.2770 hit in London trading.