FOREX-Dollar nurses losses as healthcare bill flounders

Reuters

* Fading expectations of US rate hike by year-end hit dollar
    * Bank of Japan seen dialling back its inflation target

    By Lisa TwaroniteTOKYO, July 19 (Reuters) - The dollar nursed losses on
Wednesday after skidding to a 10-month low against a currency
basket as the Republican failure to pushed through a stalled
U.S. healthcare bill raised fears about the rest of President
Donald's Trump reform agenda.
    Republican efforts to overhaul or repeal Obamacare collapsed
in the U.S. Senate on Tuesday, rattling financial markets and
casting doubt on the chances of getting Trump's economic plans,
such as tax reform and stimulus, through a divided
Congress.[nL1N1K90GB]
    The dollar index, which tracks the greenback against a
basket of six major rivals, edged up 0.1 percent to 94.694
<.DXY> after falling as low as 94.476 on Tuesday, its lowest
level since September 2016.
    The euro was steady on the day at $1.1549 , after
rising as high as $1.1583 on Tuesday, its highest since May
2016.
    Expectations that the Federal Reserve will be more cautious
about raising interest rates also weighed on the greenback.
    Economic data on Tuesday showed U.S. import prices falling
for a second straight month in June as the cost of petroleum
products declined further, suggesting inflation pressures could
remain benign for a while. [nL1N1K80QC]
    Fed Chair Janet Yellen signalled caution last week in her
congressional testimony, and disappointing U.S. inflation and
retail sales data on Friday added to evidence that the central
bank has reason to take its time in tightening. [nL1N1K30F8]
[nL1N1K50H3]
    "The failure of the healthcare bill added the newest
pressure to the dollar, but it was already under pressure after
Yellen's comments last week," said Mitsuo Imaizumi, Tokyo-based
chief foreign exchange strategist for Daiwa Securities.
    The Fed chief referred to "uncertainty," he said, a word
that "makes markets nervous," and prompted them to pare their
expectations of another interest rate hike this year, he said.
    The dollar slipped 0.1 percent on the day to 111.950 yen
, well below its nearly four-month high of 114.495 touched
last week. It fell as low as 111.685 on Tuesday, its lowest
since June 27.
    The Bank of Japan will conclude a policy meeting on
Thursday.
    Policymakers are expected to raise their economic growth
forecasts but cut their rosy inflation outlook next week,
sources say, reinforcing expectations it will lag well behind
major global central banks in dialling back its massive stimulus
programme. [nL4N1K4410]
    A majority of economists polled by Reuters expect the BOJ to
delay again its projected timing for achieving the 2 percent
inflation target. [nL3N1K83ZZ]
    The Australian dollar was up 0.1 percent at $0.7918 
after surged 1.5 percent to two-year highs on Tuesday as minutes
of the last meeting of the country's central bank showed
policymakers turned more upbeat on the economic outlook.
[nL3N1K91G4]

 (Reporting by Lisa Twaronite; Editing by Kim Coghill)
 ((lisa.twaronite@thomsonreuters.com;)(+81 3 6441 1870; Reuters
Messaging: lisa.twaronite.thomsonreuters.com@reuters.net))

Keywords: GLOBAL FOREX/
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