* Dollar steadies ahead of Trump speech to Congress
* Supported by signs of more detail on tax plans
* Fed's Kaplan points to rate rise "soon", no comment on
* European political worries still high on the agenda
* Graphic: World FX rates in 2017 tmsnrt.rs/2egbfVh
By Patrick Graham
LONDON, Feb 28 Japan's yen was the only
substantial mover among major developed world currencies on
Tuesday, rising a third of a percent against the dollar and euro
as investors sought safe havens for their money before a speech
to Congress by President Donald Trump.
Indications that Trump would use the set-piece to preview
elements of his plans to cut taxes for the middle class and make
U.S. companies more globally competitive helped the dollar
recover losses in the U.S. session on Monday.
Added to a promise from another Federal Reserve policymaker
that interest rates would rise "soon", that returned markets to
the assumptions of a reflating of the U.S. economy that have
swirled since last November, prodding short-term U.S. market
interest rates higher overnight.
But the details of Trump's speech, and his ability to
deliver legislation, have also grown increasingly to worry
markets at a time when nerves are growing around politics in
That has left investors often seeking the security of the
yen and safe haven assets including Treasuries and German Bunds
in the past month.
"There were a whole list of things on the table and at the
moment we have a market that is looking for greater clarity on
those topics," said Simon Derrick, head of global market
research with Bank of New York Mellon in London.
"If I had to call it, I think the dollar weakens because I
think that, not withstanding the signals, it is probably beyond
March before the Fed will hike. I also think the downward
pressure on yields (globally) will continue."
The yen rose a third of a percent on the day to 112.39 yen
per dollar and 119.01 yen per euro.
The dollar index rallied to a 14-year high soon after Trump
won the U.S. election in November, boosted by hopes that he
would introduce large fiscal stimulus and reflationary plans.
But the greenback sagged in January and the first half of
this month in the absence of specifics on tax reform. It is set
to end February with a gain of just over 1 percent against the
basket of currencies that measures its broader strength.
Despite that, the two currencies long seen as most exposed
to Trump's intent to reorder U.S. trade relations, the peso and
China's yuan, are both up. The peso is on course for its
best calendar month since last March and the onshore yuan for
its second straight monthly gain.
That might be undone if the president, for example,
indicates he will make good on his earlier promises to label
China a currency manipulator. Some dealers in Asia said the yen
might also be exposed.
"Obviously if Trump mentions any specific countries, their
currencies will be affected. Countries likely to attract his
attention are China, Germany, Japan and Mexico, which all have
large trade surpluses versus the United States," said Daisuke
Karakama, market economist at Mizuho Bank.
"He has mentioned China and Japan quite often as of late, so
dollar/yen is likely to be affected the most if he speaks about
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(Additional reporting by Shinichi Saoshiro in TOKYO; Editing by