Hot now: Dollar slips

TOKYO: The dollar slipped to a three-year low against a basket of currencies, headed for its biggest weekly loss in two years, as bearish factors offset support the U.S. currency could take from rising Treasury yields.

Extending overnight losses, the dollar´s index against a group of six major currencies lost about 0.4 percent to 88.253 , the lowest since December 2014. The index was on track to lose more than 2 percent on the week in its largest decline since February 2016.

The U.S. currency has been weighed down by a variety of factors this year, including concerns that Washington might pursue a weak dollar strategy and the perceived erosion of its yield advantage as other countries start to scale back easy monetary policy.

Traders also suspect that confidence in the dollar has been eroded by mounting worries over the U.S. budget deficit which is projected to balloon to near $1 trillion in 2019 amid a government spending splurge and large corporate tax cuts.

"There really are no signs of the dollar recovering anytime soon. Participants are bracing for dollar/yen to head towards 105 and the euro to climb past $1.25," said Shin Kadota, senior strategist at Barclays in Tokyo.