* Dollar gets room to breathe after previous day's tumble
* Dollar index pulls away from 4-1/2-mth lows for now
* Greenback still seen vulnerable with "Trump trade" fading
By Shinichi Saoshiro
TOKYO, March 28 The dollar limped away from
multi-month lows against its major peers early on Tuesday as the
previous day's rout petered out, but the U.S. currency remained
on shaky ground with much of the lift from the "Trump trade" now
The greenback had taken a beating as market participants saw
the prospects for a U.S. fiscal spending boost from President
Donald Trump significantly diminished by his failure to pass a
key healthcare reform bill.
The dollar remains on biased towards the downside as
expectations that the Trump administration will be able to
deliver on tax reform and infrastructure spending recede, said
Masafumi Yamamoto, chief forex strategist at Mizuho Securities
"But a one-way drop by the dollar is also unlikely as the
Republicans cannot face midterm elections in November of next
year without enacting a single fiscal stimulus step," he said.
The dollar index against a basket of major currencies as up
0.1 percent at 99.249 after dropping to 98.858 overnight,
its lowest since Nov. 11.
The index had risen to a 14-year high near 104.00 in early
January when expectations for inflation-boosting stimulus under
the Trump presidency were at their peak.
The dollar rose 0.1 percent to 110.800 yen following
its slide to a four-month low of 110.110 overnight.
The euro was a shade lower at $1.0861, nudged away
from a 4-1/2-month peak of $1.0906 scaled the previous day.
The common currency was boosted when German Chancellor
Angela Merkel's conservatives won a regional election in the
western state of Saarland on Sunday, dealing a setback to their
Social Democrat rivals and boosting her prospects of winning a
fourth term in September's national election.
The pound was steady at $1.2559 after surging
almost one percent to an eight-week high of $1.2615 overnight
against the flagging dollar.
The Australian and New Zealand dollars gained 0.1 percent to
$0.7627 and $0.7047, respectively.
(Reporting by Shinichi Saoshiro; Editing by Eric Meijer)