Sun, Mar 26, 2017 - Page 14 News List

US dollar steadies after Republicans pull healthcare bill

Reuters, NEW YORK

The US dollar on Friday pulled back from near a four-month low against the Japanese yen and snapped an eight-day losing streak against the safe-haven currency after Republicans killed their bill to overhaul the US healthcare system.

Republican leaders of the US House of Representatives pulled legislation to overhaul the US healthcare system from consideration due to a shortage of votes, despite desperate lobbying by the White House and its allies in the US Congress, dealing a stiff setback to US President Donald Trump.

With a risk-averse mood across markets, the greenback has slipped about 1.3 percent against the yen this week.

On Friday, it rose 0.31 percent to ¥111.27.

“The last few days, the market has sort of traded on the back foot on anticipation of the vote that would happen at some point this week,” said Mazen Issa, senior foreign-exchange strategist at TD Securities in New York. “Generally, risk sentiment had been undermined off of that.”

“Maybe just lifting the uncertainty premium has markets breathing a sigh of relief for now,” Issa said.

The US dollar index, which measures the greenback against a basket of six major currencies, on Friday fell 0.02 percent at 99.739, after falling to a seven-week low of 99.527 earlier in the session.

The index is down 0.6 percent from last week’s 100.30.

Investors have been split on whether a defeat for the bill would knock the US dollar and stock markets, because it would suggest Trump’s inability to get reforms through the US Congress, or whether it would boost them, as he would then be able to move straight onto tax reforms.

“If this stronger [US] dollar has legs, it depends on the next step. If there is a pivot to taxes from healthcare, the market has to see the plan,” said Paresh Upadhyaya, director of currency strategy at Pioneer Investments in Boston.

In Taipei, the New Taiwan dollar on Friday was unchanged against the greenback at NT$30.488. The NT dollar rose 0.5 percent against the US dollar from last week’s NT$30.626.

The euro on Friday gained 0.19 percent to US$1.0800, close to a seven-week peak of US$1.0825 touched on Wednesday on the view that the European Central Bank is heading toward tightening monetary policy as growth and inflation accelerates across the euro zone.

The common currency gained 0.6 percent against the greenback from last week’s US$1.0740.

Sterling on Friday fell against the US dollar and euro from the previous session’s one-month highs, as investors braced for Britain to begin next week the formal process of leaving the EU.

Additional reporting by CNA

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