Shutterstock photo* Dollar struggles broadly, Tillerson's dismissal dampensmood
* Deja vu for currencies and dollar after Cohn's exit lastweek
* Reaction to White House personnel changes seen moderating
By Shinichi Saoshiro
TOKYO, March 14 (Reuters) - The dollar wallowed against theyen and other major currencies on Wednesday after the suddendismissal of U.S. Secretary of State Rex Tillerson killed off anearlier bounce in the currency.
U.S. President Donald Trump fired Tillerson on Tuesday aftera series of public rifts over policy on North Korea, Russia andIran, replacing his chief diplomat with loyalist CIA DirectorMike Pompeo. urn:newsml:reuters.com:*:nL1N1QV0JE
It was deja vu for the currency market and the dollar, whichhad declined a week ago when the exit of White House economicadvisor Gary Cohn undermined investor sentiment towards thegreenback.
The dollar was down 0.1 percent at 106.490 yenJPY= ,having slipped overnight from a two-week high of 107.300 reachedafter wariness over a political scandal in Japan waned slightly.
The greenback also lost a bit of traction after the FebruaryU.S. inflation data released on Tuesday was in line withexpectations, suggesting the Federal Reserve remained on trackto raise interest rates at a gradual pace. urn:newsml:reuters.com:*:nLNSDEEE8Q
Masafumi Yamamoto, chief forex strategist at MizuhoSecurities in Tokyo, said comings and goings in the White Housewere becoming something of an everyday occurrence and thatdollar's reaction was likely to become more limited each time.
"For the dollar to rise above 107 yen again, it may need aclarification of the ongoing political scandal in Japan inaddition to a hint by the Fed at this month's meeting that itmight accelerate the pace of rate hikes," Yamamoto said.
The yen had risen against the dollar at the start of theweek as a political scandal engulfed Japanese Prime MinisterShinzo Abe and his close ally, Finance Minister Taro Aso.
The Japanese currency advanced as the cronyism scandalraised doubts about Abe's ability to continue pursuing hiseconomic policies, dubbed "Abenomics," which included aggressivemonetary easing.
The Fed holds a two-day policy meeting starting on March 20and the central bank is widely expected to raise interest ratesfor the first time this year.
The dollar index against a basket of six major currencieswas little changed at 89.711 .DXY after it tracked a declinein U.S. yields and shed 0.25 percent on Tuesday.
The euro was steady at $1.2394EUR= after rising 0.45percent overnight.
The pound was up 0.1 percent at $1.3982GBP=D3 and inclose reach of a two-week peak of $1.3994 scaled on Tuesday onthe back of the dollar's broad decline.
The Australian dollar was steady at $0.7860AUD=D4 afterbouncing to a two-week high of $0.7898 the previous day onrobust business indicators.
(Reporting by Shinichi Saoshiro; Editing by Sam Holmes) ((shinichi.saoshiro@thomsonreuters.com; Reuters Messaging:shinichi.saoshiro.reuters.com@reuters.net+813-6441-1774))
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