* Dollar steadies after slide to 4-1/2 month lows
* Eyes still fixed on stock market sentiment
* Iron ore dip hurts Aussie
* Graphic: World FX rates in 2017 tmsnrt.rs/2egbfVh
By Patrick Graham
LONDON, March 28 The dollar steadied on Tuesday
after its worst week since U.S. President Donald Trump’s
election in November, promises of more rises in Federal Reserve
interest rates this year helping it recover from multi-month
lows in still shaky global markets.
A dip in iron ore prices helped weaken higher-risk
currencies including the Australian and Canadian dollars,
with eyes also shifting to an appearance by Bank of Canada
Governor Stephen Poloz.
The index that measures the broader strength of their U.S.
counterpart was trading almost half a percent above
Monday's four-and-a-half month low but up just 0.1 percent on
the day after a volatile overnight session in Asia.
The yen, which has gained 4 percent in nine days as faith
erodes in the Trump White House's ability to deliver tax reform
and a promised public spending boost, was flat at 110.74 yen per
Analysts pointed to support from appearances by Dallas
Federal Reserve Bank President Robert Kaplan and Chicago Fed
chief Charles Evans as putting the emphasis back on the prospect
of more rises in U.S. interest rates.
"Clearly we shouldn't forget we are going to see at least
two more hikes by the Fed this year and that there is still the
potential for the next one to be pulled forward to June," said
CIBC strategist Jeremy Stretch.
"There is probably also a realisation that after the vote on
Friday, it may well be the case that Trump's moving away from
healthcare reform and towards fiscal issues may be constructive
from a market perspective."
The Republicans' failure to pass a replacement for Obamacare
was the trigger on Monday for a deepening of doubts about the
Trump administration's ability to pass other legislation through
Masafumi Yamamoto, chief forex strategist at Mizuho
Securities in Tokyo said those concerns meant the bias remained
towards more dollar weakness.
"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 euro was down just 0.1 percent at $1.0854, after
reaching $1.0906 in the previous session, its highest since Nov.
The Aussie, battered by the weakening in global sentiment
and a fall in the prices China pays for its iron ore, was down
Ahead of Poloz's appearance around 1400 GMT, the Canadian
dollar was also a quarter of a percent weaker on the day at
For Reuters Live Markets blog on European and UK stock
markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets
(Writing by Patrick Graham; editing by Richard Lough and Ed