NEW YORK (Reuters) - A fresh setback to U.S. President Donald Trump’s domestic agenda on Tuesday wounded an already-limping U.S. dollar and deflated U.S. Treasury yields.

A U.S. Dollar note is seen in this June 22, 2017 illustration photo. REUTERS/Thomas White/Illustration

The collapse of his fellow Republicans’ push to overhaul or repeal Obamacare in the U.S. Senate again raised doubts in financial markets about Trump’s ability to enact tax cuts and infrastructure spending.

The dollar .DXY fell 0.51 percent against a basket of key currencies, setting a 10-month low and extending its 2017 decline to more than 7 percent.

“The setback for Trump is a setback for the U.S. dollar,” said Kathy Lien, managing director at BK Asset Management in New York. “I think that really casts doubt on the Trump administration’s broader strategies.”

Wall Street ended mixed after a heavy dose of corporate earnings, with the Dow industrials sagging and the Nasdaq Composite hitting a record high.

The Dow Jones Industrial Average .DJI fell 54.99 points, or 0.25 percent, to 21,574.73.

But the S&P 500 .SPX gained 1.47 points, or 0.06 percent, to 2,460.61 and the Nasdaq Composite .IXIC added 29.87 points, or 0.47 percent, to 6,344.31.

Netflix NFLX.O shares soared after the streaming television company's strong customer growth, boosting the Nasdaq.

Goldman Sachs GS.N dropped 2.6 pct after its results, weighing on the Dow.

Harley-Davidson HOG.N shares tumbled after the motorcycle maker's weak forecast.

In Europe, the pan-European FTSEurofirst 300 index .FTEU3 lost 1.11 percent. Sweden's Ericsson ERICb.ST and fashion retailer Zalando ZALG.DE plummeted after their respective reports.

MSCI's gauge of stocks across the globe .MIWD00000PUS gained 0.03 percent, hitting an all-time high for a fourth straight session.

The euro EUR= was up 0.66 percent to $1.1554 against the dollar, and hit its strongest level against the U.S. currency since May 2016.

Aside from the Trump agenda setback, there are increasing doubts about further near-term rate hikes by the Federal Reserve.

Expectations for the Fed hiking interest rates this year have been pushed back to the fourth quarter, the latest Reuters poll of economists showed. A poll conducted last month predicted the Fed would raise rates by September.

“To think that (the dollar) will get back to where it was in early December is a very hard bet,” said Michael Purves, chief global strategist at Weeden & Co.

Sterling fell against the dollar and euro, after data showed British inflation unexpectedly slowing for the first time since October last year, lowering expectations of an interest rate increase this year.

U.S. Treasury yields fell, as investors grew cautious about the latest political drama in Washington, with weak economic data adding to the uncertainty about the pace of future interest rate hikes.

“It does add some uncertainty as to whether the administration and a cooperative Congress is able to push through with priorities that was communicated in the election period,” said Bill Northey, chief investment officer at U.S. Bank Private Client Group in Helena, Montana.

Benchmark 10-year notes US10YT=RR last rose 14/32 in price to yield 2.2607 percent, from 2.309 percent late on Monday.

Yields across the globe had risen sharply after Trump won the U.S. election in November on promises for tax reforms and infrastructure investment that were expected to boost growth and inflation in the world’s largest economy.

Oil prices rose slightly as Saudi exports fell and solid demand soaked up some of what is seen as an oversupplied market, but Ecuador’s decision to opt out of a supply reduction pact complicated the outlook for the OPEC-led cut agreement.

U.S. crude CLcv1 rose 1 percent to $46.48 per barrel and Brent LCOcv1 was last at $48.91, up 1.01 percent on the day.

Copper CMCU3 rose 0.13 percent to $6,004.00 a tonne. Spot gold XAU= added 0.7 percent to $1,241.99 an ounce.