U.S. Markets

Dollar trades in tight range as U.S. healthcare vote looms

NEW YORK (Reuters) - The dollar hovered near a four-month low against the Japanese yen on Thursday ahead of a vote on a U.S. Republican healthcare plan seen as a litmus test of President Donald Trump’s ability to pass key policies such as tax cuts through Congress.

Euro, Hong Kong dollar, U.S. dollar, Japanese yen, pound and Chinese 100 yuan banknotes are seen in this picture illustration, January 21, 2016. REUTERS/Jason Lee/Illustration/File Photo

Trump was set to make a final push in the House of Representatives to secure the votes to begin dismantling Obamacare, amid signs that enough Republicans might defect to jeopardize one of his top legislative priorities.

“It’s really the big focal point as we sit here today,” said Bill Northey, chief investment officer at the private client group of U.S. Bank in Helena, Montana.

The dollar was down 0.32 percent at 110.78 yen, after dipping to a low of 110.64 yen JPY= earlier in the session.

The greenback soared to a 14-year peak after Trump’s election last year on expectations that he would cut corporate and other taxes and increase infrastructure spending, boosting economic growth.

That faith has been shaken since the turn of the year, and the dollar has fallen against all of its major peers in response.

If the House does not approve the healthcare proposal, “it would be dollar-negative and somewhat negative also for general risk appetite,” said Alvise Marino, FX strategist at Credit Suisse in New York.

The dollar traded in a tight range. The dollar index .DXY, which measures the greenback against a basket of six major currencies, was little changed at 99.757.

Sterling jumped to a nearly one-month high against the dollar after retail sales data in the United Kingdom came in much better than expected, soothing worries about weakening consumer sentiment in Britain as it prepares to leave the European Union.

The numbers bolstered speculation that the Bank of England might be able to raise interest rates at least once in the next year, driving the pound GBP= half a cent higher.

Australia's dollar AUD= fell 0.66 percent to a 1-week low against the greenback on a slump in prices for its iron ore exports and nervousness in China's money market.

Reporting by Saqib Iqbal Ahmed; Editing by Lisa Von Ahn and Paul Simao