| SYDNEY, March 27
SYDNEY, March 27 The U.S. dollar took a spill in
early Asian trade on Monday as investors in the region fretted
about the chances of U.S. fiscal stimulus following the defeat
of President Donald Trump's healthcare package.
The move was exaggerated by a very thin market with the
dollar down over half a percent against the yen at one stage to
a 110.78 low and was last trading at 110.83.
The euro initially hopped to a near four-month peak at
$1.0846 and was last up 0.37 percent at $1.0837. Against
a basket of currencies, the dollar was down 0.17 percent at
Traders said the market was divided on what the failure of
Trump's healthcare bill meant for the outlook for U.S. tax cuts
and infrastructure spending.
"There is a widespread perception that failure to pass the
healthcare bill somehow derails the rest of the Trump agenda,"
said Tom Porcelli, chief U.S. economist at RBC Capital Markets.
"We think linking this particularly difficult legislative
undertaking with the rest of the Trump is flawed," he argued.
"It actually presents a scenario where tax reform can
potentially be accelerated."
This view was offered as one reason Wall Street rallied late
Friday even as the healthcare bill went down in flames.
Others, however, including much of the mainstream press
wondered how Trump would get any major changes through such a
fractious Congress. It was notable that futures for the S&P 500
eased 0.35 percent in early trade on Monday.
"It clearly highlights that divides remain, and it means
that the policy paralysis that was often evident over recent
years could linger," wrote analysts at ANZ in a note.
"With fiscal policy uncertainty rising again the risk is
that business and consumer sentiment reverse recent gains, which
would have growth consequences."
(Editing by Lincoln Feast)