December 5, 2017 / 3:20 PM / a year ago

FOREX-Dollar gains for second day on U.S. tax reform hopes

    * Dollar gains seen limited next year-ING
    * Euro seen as beneficiary of dollar weakness
    * Sterling slips, but remains on uptrend-analyst

 (Recasts first few paragraphs, updates prices, adds comment,
table, changes byline, dateline; previous LONDON)
    By Gertrude Chavez-Dreyfuss
    NEW YORK, Dec 5 (Reuters) - The dollar rose for a second
straight session on Tuesday, a day after posting its biggest
daily rise in a week, as the currency continued to benefit from
optimism surrounding U.S. tax reform.
    While the Senate and House of Representative have
differences on the U.S. tax bill, it looks like it's just a
matter of time before the final bill reaches President Donald
Trump for final approval, Hussein Sayed, chief market strategist
at FXTM in Dubai said.
    "This scenario will probably continue to provide the
greenback support for the remainder of 2017, with pullbacks seen
as an opportunity for bulls."
    On Monday, the  Republican-controlled House of
Representatives voted to go to conference with the Senate on tax
legislation, setting up formal negotiations on the bill that 
could take weeks to complete.
    The Republican-led Senate is expected to hold a similar
conference vote later this week.
    In mid-morning trading, the dollar index, a gauge of the
greenback's value against six major currencies, was up 0.1
percent at 93.308.
    Against the yen, the dollar gained 0.2 percent to 112.70 yen
. The euro, meanwhile, was down 0.3 percent versus the
dollar at $1.1832
    Though the dollar has recovered some poise after falling to
a two-month low last week, some market strategists expect
further dollar gains next year to be limited, with the euro
likely to be the beneficiary.
    In a 2018 outlook report published on Tuesday, ING
strategists expect the euro to rise to $1.30 against the dollar
next year, a level it hasn't traded at since September 2014.
    "The euro is in the sweet spot of this global recovery and
looks well-positioned for the investment cycle," said Petr
Krpata, chief EMEA FX strategist at ING in London.       
    Meanwhile, sterling trimmed earlier losses to trade 0.3
percent down on the day at $1.3427 as broad disappointment over
the lack of a Brexit deal prompted some investors to cut their
long bets. It hit an intraday low of $1.3370.
    Prime Minister Theresa May failed to clinch a deal on Monday
to open talks on post-Brexit free trade with the European Union
after a tentative deal with Dublin to keep EU rules in Northern
Ireland angered her allies in Belfast.
    "I don't think this is a market that is too long sterling,
but there definitely has been an increase in the excitement
level of late with sterling/dollar staying very close to a nice
uptrend over the last several months," said W. Brad Bechtel,
managing director, at Jefferies LLC in New York.
    Currency bid prices at 10:04AM (1504 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
 Euro/Dollar      EUR=        $1.1832        $1.1864     -0.27%         +12.55%     +1.1877     +1.1814
 Dollar/Yen       JPY=        112.7400       112.4000    +0.30%         -3.53%      +112.8300   +112.3800
 Euro/Yen         EURJPY=     133.39         133.35      +0.03%         +8.32%      +133.7400   +133.2100
 Dollar/Swiss     CHF=        0.9867         0.9848      +0.19%         -3.06%      +0.9874     +0.9838
 Sterling/Dollar  GBP=        1.3429         1.3478      -0.36%         +8.86%      +1.3482     +1.3373
 Dollar/Canadian  CAD=        1.2669         1.2668      +0.01%         -5.67%      +1.2683     +1.2624
 Australian/Doll  AUD=        0.7607         0.7598      +0.12%         +5.43%      +0.7653     +0.7598
 Euro/Swiss       EURCHF=     1.1675         1.1686      -0.09%         +8.94%      +1.1703     +1.1661
 Euro/Sterling    EURGBP=     0.8808         0.8802      +0.07%         +3.40%      +0.8867     +0.8800
 NZ Dollar/Dolar  NZD=        0.6874         0.6856      +0.26%         -0.97%      +0.6907     +0.6852
 Dollar/Norway    NOK=        8.3228         8.3224      +0.00%         -3.64%      +8.3614     +8.2737
 Euro/Norway      EURNOK=     9.8485         9.8775      -0.29%         +8.39%      +9.9188     +9.8130
 Dollar/Sweden    SEK=        8.4460         8.4182      +0.03%         -7.27%      +8.4485     +8.3993
 Euro/Sweden      EURSEK=     9.9930         9.9902      +0.03%         +4.31%      +10.0145    +9.9656
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/))

 (Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by
Saikat Chatterjee in London; Editing by Phil Berlowitz)
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