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FOREX-Dollar slips on doubts over swift U.S. fiscal policy changes
February 24, 2017 / 4:41 PM / 10 months ago

FOREX-Dollar slips on doubts over swift U.S. fiscal policy changes

(Updates prices, adds comments; changes byline, dateline, pvs LONDON)

* Dollar set for first week of falls in three

* Greenback hurt by Mnuchin tax reform comments

* Dollar hits more than 2-wk low vs yen of 112.06 yen

* Bitcoin hits all-time high

By Sam Forgione

NEW YORK, Feb 24 (Reuters) - The U.S. dollar slipped to a more than two-week low against the yen and a one-week trough on a closely followed index on Friday as investors doubted the likelihood of swift tax reform and a quick boost in spending from U.S. President Donald Trump’s administration.

The dollar index, which measures the greenback against a basket of six major currencies, was set to snap two straight weeks of gains with a weekly loss.

On Thursday, U.S. Treasury Secretary Steven Mnuchin suggested that much work was still needed on key elements of a tax reform plan, one of the policies investors had anticipated would spur inflation and drive up U.S. interest rates.

Analysts said that, with little else in the way of new developments, Federal Reserve meeting minutes released Wednesday showing that there was much less urgency to raise rates among voting members continued to fuel doubts that the U.S. central bank would raise interest rates next month.

The dollar index was down 0.12 percent at 100.930 after hitting a one-week low of 100.660. The index hit a 14-year high of 103.820 at the start of the year, largely on the hopes surrounding Trump’s avowed pro-growth policies.

“There is only so much that markets can do on hope and speculation, and I think we’re at a stage now where investors want to see some concrete details on any fiscal package from the government,” said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington.

“That lack of detail on the fiscal side of the equation is inhibiting the dollar’s ability to retest those highs,” he said.

The dollar was down 0.3 percent against the yen at 112.23 yen after touching 112.06 yen, its lowest since Feb. 9. The euro was up slightly against the dollar at $1.0587.

“Ultimately, outside of the U.S. there is reflation happening and data is looking strong, so perhaps it’s time to just take some dollar longs off the table,” said UBS Wealth Management currency strategist Geoffrey Yu in London.

Digital currency bitcoin hit a record high of $1,220 in Asian trade on speculation that a bitcoin exchange traded fund (ETF) is set to get approval from the U.S. regulator. (Reporting by Sam Forgione; Additional reporting by Jemima Kelly in London Editing by W Simon)

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