(Repeats to widen distribution)
* Yen gains on global political uncertainty
* Euro up vs dollar, but outlook down overall
By Gertrude Chavez-Dreyfuss
NEW YORK, Feb 8 The dollar fell on Wednesday
after two days of gains, pressured by the decline in U.S.
Treasury yields as investors have priced out a March rate hike
by the Federal Reserve amid uncertainty about President Donald
Trump's economic policies.
Joe Manimbo, senior market analyst at Western Union Business
Solutions, said the drop in yields reflected investor
frustration about the Trump administration's lack of details on
its stimulus agenda.
Concerns about the impact on the world economy of Trump's
protectionism and immigration policy have also undermined the
greenback, along with the new administration's hints that it
would prefer a weaker dollar.
Manimbo also said the perception that a U.S. rate hike is
off the table over the first quarter of the year has also
weighed on the U.S. currency and pushed Treasury yields lower.
The safe-haven yen, meanwhile, rose amid concerns around
global political risks in Europe with the onslaught of elections
this year in France, Germany, Netherlands, and possibly Italy.
The euro recovered against the dollar on Wednesday from more
than one-week lows, on short-covering after days of losses. But
its fortunes over the last few days have been largely tied to
developments in France's looming presidential elections.
"The French political noise has brought the euro down and
that has given the dollar a reprieve," said Gavin Friend, a
strategist with National Australia Bank in London.
"Markets know that if Trump was to come out and start
talking about tax reform and infrastructure spending, the dollar
would go up. The dollar rose a long way at the end of last year,
it has come back, now we are sitting around waiting for the next
In late morning trading, the dollar index fell 0.2 percent
to 100.10, as the greenback slid 0.6 percent to 111.94
The euro was down 0.3 percent against the yen at 119.69 yen
, but rose 0.2 percent versus the dollar to $1.0702
Uncertainty about the two rounds of the French presidential
election on April 23 and May 7 drove the premium that investors
demand for holding French over German government debt to its
highest in more than four years.
Opinion polls show Centrist Emmanuel Macron slightly ahead
of conservative Francois Fillon in the first round, but behind
far-right National Front leader Marine Le Pen, who has vowed to
pull France out of the euro zone and hold a vote on its
membership in the European Union.
(Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by
Patrick Graham in London; Editing by Tom Brown)