* Trump to speak on Tuesday on economic plans
* Investors fear lack of details from Trump
* Yen weakens as U.S. bond yields rise
(Recasts with market move, adds quotes, updates prices)
By Karen Brettell
NEW YORK, Feb 27 The U.S. dollar was steady
against a basket of currencies on Monday ahead of a busy week
that will include a speech by U.S. President Donald Trump on the
economy and numerous comments from Federal Reserve officials.
Treasury Secretary Steven Mnuchin said on Sunday that Trump,
in an address to Congress on Tuesday, will preview some elements
of his plans to cut taxes for the middle class, simplify the tax
system and make U.S. companies more globally competitive.
Some investors are worried, however, that specific economic
plans may be scarce and that any impact from reforms are
unlikely to be seen anytime soon. Mnuchin said last week that he
wanted to pass “significant” tax legislation by August, which is
later than many investors had hoped.
Mnuchin “seemed to indicate the details of tax reform will
be known probably closer to the latter half of the summer, and
we can most likely expect 3 percent growth towards the latter
end of 2018,” said Bipan Rai, senior macro strategist at CIBC
Capital Markets in Toronto.
“Both of those are somewhat at odds with what the market was
hoping for in terms of near-term growth and more clarity around
tax reform sooner rather than later,” Rai said.
The greenback was last up 0.03 percent against a basket of
six major currencies at 101.12, after earlier falling to 100.69
The dollar dropped 0.27 percent against the euro to
$1.0588 and gained 0.51 percent against the yen to 112.75 yen
With any impact from Trump’s economic policies unlikely to
be seen near-term, investors are focused on whether current
growth is strong enough to lead the U.S. Fed to raise rates in
The dollar reversed earlier weakness on Monday and the
Japanese yen weakened as U.S. bond yields rose from more than
one-month lows, indicating a perception that a rate hike is more
likely in the coming months.
"I’d say the fundamental driver is interest rate
differentials,” said Marc Chandler, global head of currency
strategy at Brown Brothers Harriman in New York.
Moves between the dollar and yen are the most correlated
with the differential between Japan and the U.S.'s 10-year bond
yields in over a decade, Chandler noted.
Dallas Fed President Robert Kaplan said on Monday that the
Fed might need to raise interest rates in the near future to
avoid falling behind the curve on inflation.
(Editing by Chizu Nomiyama)