March 7, 2018 / 5:03 PM / 9 months ago

FOREX-Dollar stabilizes after exit of Trump's top economic adviser

    * Top economic adviser's departure stokes trade war concerns
    * Uncertainies whether Trump will impose steel, aluminum
    * Upbeat U.S. labor cost, private jobs data offset Cohn exit
    * Trade-weighted euro index touches highest since Sept 2014

 (Updates market action, changes dateline, previous London)
    By Richard Leong
    NEW YORK, March 7 (Reuters) - The dollar held steady on
Wednesday, recouping earlier losses tied to the exit of a top
economic adviser to U.S. President Donald Trump, which had
raised concerns that tensions over a global trade war were
entering a heightened phase.
    Doubts among traders persist over whether Trump's proposed
tariffs on imported steel and aluminum will be enacted, even
after the White House signaled they would go into effect
following the resignation of Gary Cohn, the director of the
National Economic Council.
    Traders also are looking to gauge the level of possible
retaliation from the European Union, Canada, Mexico and other
major U.S. trade partners if these stiff levies were to be
    "So far the reaction has been muted," Sireen Harajli,
currency strategist at Mizuho in New York, said of the dollar.
"(Cohn's) resignation has signaled higher risk of a trade war."
    Cohn's departure comes against the backdrop of steps by the
Trump administration to assert protectionist policies, including
withdrawing the United States from the Trans-Pacific
Partnership, instigating a renegotiation of NAFTA and imposing
hefty import tariffs on some targeted products. 
    The dollar and global stock markets initially sagged on the
Cohn departure. The greenback staged a steady recovery during
U.S. trading, while Wall Street shares pared initial losses.  
    At 11:44 a.m. (1644 GMT), the index that tracks the dollar
versus six currencies rose 0.135 points or 0.15 percent,
to 89.753, rebounding from an earlier low of 89.407.
    The dollar's bounce was further stoked by encouraging data
on domestic private hiring and labor costs that reinforced the
view of underlying strength in the U.S. economy. However, those
figures were mitigated by a larger-than-forecast widening of the
U.S. trade deficit in January.
    Nevertheless, anxiety about a deterioration in global trade
limited the dollar rebound with some traders favoring the yen as
a safe haven, analysts said.
    "We therefore see the latest news as an additional reason to
remain cautious on the outlook for the broad dollar," Goldman
Sachs economists Zach Pandl and Karen Reichgott wrote in a
research note.
    The dollar was down 0.02 percent at 106.09 yen. It
held just above a 14-month low of 105.23 yen set last week,
Reuters data showed. 
    The euro was last down 0.10 percent, at $1.2389.
    The trade-weighted euro index hit 100.2565, the
highest level since September 2014. 
    Currency bid prices at 11:43AM (1643 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
 Euro/Dollar      EUR=        $1.2394        $1.2402     -0.06%         +3.32%      +1.2443     +1.2385
 Dollar/Yen       JPY=        106.1000       106.1100    -0.01%         -5.83%      +106.2100   +105.4700
 Euro/Yen         EURJPY=     131.52         131.63      -0.08%         -2.71%      +131.7400   +130.9500
 Dollar/Swiss     CHF=        0.9426         0.9405      +0.22%         -3.25%      +0.9439     +0.9358
 Sterling/Dollar  GBP=        1.3886         1.3885      +0.01%         +2.77%      +1.3912     +1.3847
 Dollar/Canadian  CAD=        1.2976         1.2875      +0.78%         +3.17%      +1.2988     +1.2875
 Australian/Doll  AUD=        0.7800         0.7827      -0.34%         -0.01%      +0.7829     +0.7772
 Euro/Swiss       EURCHF=     1.1685         1.1668      +0.15%         -0.03%      +1.1698     +1.1632
 Euro/Sterling    EURGBP=     0.8924         0.8932      -0.09%         +0.46%      +0.8967     +0.8919
 NZ Dollar/Dolar  NZD=        0.7264         0.7288      -0.33%         +2.51%      +0.7299     +0.7256
 Dollar/Norway    NOK=        7.8088         7.7755      +0.43%         -4.85%      +7.8227     +7.7625
 Euro/Norway      EURNOK=     9.6824         9.6451      +0.39%         -1.69%      +9.6959     +9.6439
 Dollar/Sweden    SEK=        8.2533         8.2057      +0.51%         +0.63%      +8.2557     +8.1964
 Euro/Sweden      EURSEK=     10.2304        10.1785     +0.51%         +3.98%      +10.2463    +10.1774
All spots FX= 
Tokyo spots AFX= 
Europe spots EFX= 
Volatilities FXVOL= 
Tokyo Forex market info from BOJ TKYFX World central bank news
Economic Forecasts... ECON   Official rates...INT/RATE
Forex Diary.......MI/DIARY   Top events........M/DIARY
Diaries...........DIARY Diaries Index........IND/DIARY
Press Digests.....PRESS Polls on G7 economies..SURVEY/
European markets......MARKETS/))


 (Additional reporting by Saikat Chatterjee in London
Editing by Jon Boyle and Meredith Mazzilli)
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