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FOREX-Dollar on back foot after U.S. healthcare vote postponed
March 24, 2017 / 12:55 AM / 9 months ago

FOREX-Dollar on back foot after U.S. healthcare vote postponed

* Dollar on defensive with U.S. healthcare bill bogged down

* Trump unable to close deal with Republicans on healthcare vote

* Dollar on track to lose 1.5 pct vs yen on the week

By Shinichi Saoshiro

TOKYO, March 24 (Reuters) - The dollar was on the back foot early Friday when voting on the Trump administration’s landmark healthcare bill was postponed, casting doubt on President Trump’s ability to close political deals.

Trump failed on Thursday to reach a deal with Republican lawmakers on how to dismantle Obamacare, forcing a delay in voting on the healthcare bill.

The vote on the bill, which was expected to be a early legislative win for Trump, was seen by investors across a spectrum of asset classes as a litmus test for his ability to work with Congress and push through key policies such as tax reform and infrastructure spending.

“There really isn’t much for the market to do but wait for the bill vote now that it has been postponed. There is very little incentive to push the dollar in either direction until then,” said Ayako Sera, senior market economist at Sumitomo Mitsui Trust.

“Even if the bill happens to be passed, any bounce by the dollar is likely to be limited. There are plenty of other issues Trump has to contend with going forward, such as tax reforms.”

The U.S. currency was little changed at 110.980 yen, within reach of a four-month low of 110.620 plumbed overnight. For the week the dollar was set to lose 1.5 percent against its Japanese peer.

The greenback was buffeted this week as investor expectations that Trump would be able to push through pro-growth measures were overturned by the president’s uphill struggle to fulfil his campaign promise to “repeal and replace” Obamacare, hurting equities but benefiting the safe-haven yen.

The dollar index against a basket of major currencies was on track to lose 0.5 percent this week, during which it stooped to a seven-week low.

The euro was steady at $1.0783. The common currency, which advanced to a seven-week peak of $1.0825 on Wednesday, was headed for a 0.4 percent weekly gain.

The pound was effectively flat at $1.2518, not far from a one-month high of $1.2532 reached overnight on upbeat British retail sales data.

The Australian dollar was up 0.1 percent at $0.7632 and the New Zealand dollar was flat at $0.7029. (Reporting by Shinichi Saoshiro; Editing by Eric Meijer)

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