Dollar hit by Trump's healthcare defeat, drops to near two-month low

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Dollar hit by Trump's healthcare defeat, drops to near two-month low

Asia markets inched lower on Monday in morning session after US President Donald Trump suffered a legislative defeat last Friday when Republican leaders pulled a bill to overhaul the US healthcare system.

The inability to overhaul the USA healthcare system, a major election campaign promise of Trump and his allies, marked a significant political setback for the president in a Congress controlled by his own party. Traders are bracing for the dollar's further decline as the excitement surrounding Trump's electoral victory wanes and the reality sets in that his plans may not be as easy to implement as he promised during his campaign.

The dollar was weaker at 99.315 against a basket of currencies at a four-and-a-half month low.

US equity futures now suggest an extension of Friday's late-session declines on Wall Street, with the Dow Jones Industrial Average poised to fall 88 points at the opening bell, the S&P 500 13.75 points and the Nasdaq 28.5 points.

The dollar was down 0.8 percent at 110.470 yen after touching 110.420, its weakest since November 22.

Oil prices were also active overnight, with benchmark WTI futures for May delivery falling almost 1% to $47.49 per barrel from Friday's closing price while Brent contracts for the same month were marked 0.8% lower at $50.80 each.

"There is a widespread perception that failure to pass the healthcare bill somehow derails the rest of the Trump agenda", said Tom Porcelli, chief United States economist at RBC Capital Markets.

"There is a widespread perception that failure to pass the healthcare bill somehow derails the rest of the Trump agenda", said Tom Porcelli, chief US economist at RBC Capital Markets.

"How quickly the Whitehouse administration can pivot to and get a convincing message across on tax reform will likely be the major focus early in the week", said Stephen Innes, senior trader at Oanda.

"It clearly highlights that divides remain, and it means that the policy paralysis that was often evident over recent years could linger", wrote analysts at ANZ in a note.

Sterling jumped almost 1% against the dollar to $1.2580 at one point.

The Australian dollar was steady at $0.7629 and the New Zealand dollar rose 0.2 per cent to $0.7046.

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