Shutterstock photo* U.S. seeking to impose tariffs on Chinese imports
* Euro dives after dovish comments by ECB's Draghi
* Graphic: World FX rates in 2018 http://tmsnrt.rs/2egbfVh
LONDON, March 14 (Reuters) - The dollar held near one-weeklows on Wednesday as the sudden dismissal of U.S. Secretary ofState Rex Tillerson and news that Washington is seeking toimpose tariffs of up to $60 billion of Chinese importsreverberated through currency markets.
The prospect of a global trade conflict has weighed on thedollar and any escalation would significantly weaken it further.The greenback has been supported by growing expectations of asmuch as four rate hikes this year.
"The U.S. administration has slipped further into chaos andthe current Trump-induced dollar weakness can have an effect forsome time, but not forever as fundamental forces come to thefore," said Ulrich Leuchtmann, an analyst at Commerzbank.
The dollar index .DXY broadly flat at 89.56, its lowestlevel since March 8 and within striking distance of a one-monthlow of 89.40.
Against the yen, the dollar was flat at 106.640 yenJPY=EBS , having slipped overnight from a two-week high of107.300 reached after wariness over a political controversy inJapan waned slightly.
U.S. President Donald Trump is seeking to impose tariffs onup to $60 billion of Chinese imports and will target thetechnology and telecommunications sectors, two people whodiscussed the issue with the Trump administration said onTuesday. urn:newsml:reuters.com:*:nL1N1QV28W
The news comes before a crucial G20 meeting next week wherethe world's leaders will pledge to fight unfair trade practicesand stress the role of global trade rules in the backdrop of abrewing trade war. urn:newsml:reuters.com:*:nL8N1QV68U
The greenback also lost some traction after February U.S.inflation data out on Tuesday matched expectations, suggestingthe Federal Reserve remained on track to raise interest rates ata gradual pace.
Elsewhere, the euro hit the day's lows after ECB PresidentMario Draghi struck a dovish tone in his speech.
The single currency EUR=EBS was down 0.2 percent on theday, at $1.2364.
The European Central Bank needs further evidence thatinflation is rising towards its target but is also growing moreconfident that it is on track to do so, ECB President MarioDraghi said on Wednesday. urn:newsml:reuters.com:*:nF9N1O4014
The pound rose about 0.2 percent to a two-week high of$1.3996.
The Australian dollar added 0.1 percent to $0.7870AUD=D4 and in reach of a two-week peak of $0.7898 scaled the previousday on robust business indicators. (Reporting by Saikat ChatterjeeAdditional reporting by Shinichi Saoshiro in TOKYOEditing by Raissa Kasolowsky) ((saikat.chatterjee@thomsonreuters.com; +44-20-7542-1713;Reuters Messaging: saikat.chatterjee.reuters.com@reuters.net))
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