* Dollar off recent lows in Asia, outlook uncertain
* Healthcare vote likely later Friday, to test reflation trade
* Asia shares mixed, report Trump to examine free trade deals
* Safe-haven gold fades, oil dogged by supply overhang
By Wayne Cole
SYDNEY, March 24 (Reuters) - The dollar recouped a little lost ground on Friday amid signs a delayed vote on President Donald Trump’s healthcare bill would go ahead later in the day, though it remained unclear whether it would pass.
Investors regard the vote as test for the Trump presidency that could show whether it can muster the backing needed to push through fiscal measures central to its economic agenda.
European bourses were seen opening a shade firmer while S&P 500 futures added 0.25 percent as investors dipped a toe back into risk trades after a week of wild mood swings.
Australia bounced back from a tough few days to be up 0.8 percent, while MSCI’s broadest index of Asia-Pacific shares outside Japan was all but flat.
Japan’s Nikkei added 0.8 percent, encouraged by a slight softening in the yen. A Reuters poll out on Friday also showed confidence among Japanese manufacturers rose for a seventh straight month to a three-year high.
Trump will get a second chance to try to close the deal with Republican lawmakers on dismantling Obamacare in a high-stakes vote on a new healthcare bill later in the day.
Some in the markets suspect a failure to pass the bill could endanger Trump’s promises of tax cuts and stimulus so beloved by Wall Street and U.S. corporates.
“The Trump reflation trade - particularly the equity leg of it, which has seen U.S. equity indexes roar to record highs – has arguably been long on optimism and short on substance for some time now,” said analysts at ANZ in a note.
“It comes at a sensitive time for the market, with the initial post-election exuberance having waned and as it weighs up political uncertainty, a strong U.S. economy and an increasingly hawkish Federal Reserve.”
Adding to the unease was a Reuters report that the Trump administration is preparing new executive orders to re-examine all 14 U.S. free trade agreements, including those in Asia, to aid American companies.
After falling sharply mid-week, Wall Street had lapsed into waiting mode on Thursday with the Dow down 0.02 percent. The S&P 500 lost 0.11 percent and the Nasdaq 0.07 percent.
As stocks have stalled, bonds rallied. Two-year Treasury yields have fallen 14 basis points in the past week or so to stand at 1.27 percent.
At the same time, German yields have risen on speculation the European Central Bank might begin the long process of rate normalisation this year. The central bank issued an upbeat outlook on the Euro zone economy overnight.
The net result was a contraction in the dollar’s yield advantage over the euro, which has seen the single currency steady at $1.0767 after scoring a six-week top of $1.0828 earlier this week.
The dollar did gain 0.3 percent on the yen to 111.31, having hit a four-month low of 110.62 the day before. Against a basket of currencies, it was up 0.2 percent at 99.962 having shed 1.3 percent in the past two weeks.
“The dollar is likely to struggle as global investors gradually realise that the U.S, can still produce policy gridlock even with one party holding the White House, Senate and House,” said Sean Callow, a senior currency analyst at Westpac.
“Moreover, the euro is looking more appealing, with the growth gap with the U.S. not as wide as previously thought and the euro having lost some of its political risk premium as European voters edge away from local Trump wannabes.”
In commodity markets, safe-haven spot eased a touch to $1,243.30 an ounce after hitting three-week high of $1,253.12 overnight.
Oil prices idled near four-month lows on investor concerns that OPEC-led supply cuts were not yet reducing record U.S. crude inventories.
U.S. crude inched up 19 cents to $47.89, while Brent crude added 14 cents to $50.70. (Editing by Simon Cameron-Moore)