* Dollar steady after 8 straight days of losses v yen
* Uncertainty over Trump administration reforms
* ECB tightening expectations underpin euro
* Graphic: World FX rates in 2017 tmsnrt.rs/2egbfVh
By Jemima Kelly
LONDON, March 24 The dollar steadied against the
yen on Friday after its worst run of daily losses versus the
safe-haven currency since 2010, but gains were capped by worries
that U.S. President Donald Trump was on course for defeat on a
new healthcare bill.
With a risk-averse mood having taken hold across markets
this week on doubts over Trump's ability to deliver the fiscal
and economic reforms that had driven bets on higher growth,
inflation and interest rates, the greenback slipped 1.3 percent
against the yen to four-month lows.
Though the dollar was flat on the day at just under 111 yen
on Friday, it has still fallen over 3 percent over the past
fortnight -- its worst showing since early August 2016 -- as the
so-called "Trumpflation trade" has faded. Up to Thursday, it had
posted eight days of consecutive losses.
Lawmakers in U.S. Congress will vote on new healthcare
legislation later on Friday. It was not clear late on Thursday
evening that Trump and the Republican leaders who crafted the
bill had enough support to pass it, meaning Trump now risks
defeat in his first attempt at major legislation reform.
Postponement of the vote from Thursday initially knocked the
dollar and stock markets on Thursday, but both later trimmed
Investors were split on whether a potential defeat for Trump
would knock the dollar and stock markets -- because it would be
seen as symptomatic of his inability to get reforms through
Congress -- or whether it would boost them, as he would then be
able to move straight onto tax reforms.
"Financial markets are in wait-and-see mode...although there
is an underlying sense of optimism after Donald Trump...declared
Congress should accept the changes or live with Obamacare,
paving the way for government to refocus its attention on tax
reform," said Oanda market analyst Craig Erlam, in London.
MUFG currency strategist Derek Halpenny, also in London,
said that whatever the outcome of the healthcare vote, the
dollar still looked vulnerable.
"There are numerous other uncertainties that suggest
anything but a smooth course ahead for implementing the much
anticipated tax reform reflation programme," he said.
"We still expect a much smaller tax cutting programme simply
due to the inability to agree on how a large programme could be
financed... The Trump reflation trade could still reverse course
in a more meaningful way, resulting in dollar weakness."
Against a basket of currencies, the dollar edged down 0.1
percent to 99.670. It was on track to lose over half a
percent this week, during which it slipped to a seven-week low
The euro gained 0.2 percent to $1.0804, close to a
seven-week peak of $1.0825 touched on Wednesday on the view that
the European Central Bank is heading towards tightening monetary
policy amid accelerating growth and inflation rates across the
For Reuters Live Markets blog on European and UK stock
markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets
(Additional reporting by Shinichi Saoshiro in Tokyo; Editing by
Keith Weir and Toby Davis)