* Republicans postpone bill after failing to find votes
* Bill seen as litmus test of Trump on legislation
* Failure would weaken "Trumpflation" trades, dollar
* Stock markets head for worst week since early November
* Graphic: World FX rates in 2017 http://tmsnrt.rs/2egbfVh
By Patrick Graham
LONDON, March 24 (Reuters) - All eyes in global financial markets were fixed on stuttering Republican efforts to pass a replacement for Obamacare on Friday, with failure likely to undermine faith in Donald Trump's promise to deliver a "phenomenal" U.S. tax reform.
Tuesday's first 1 percent daily fall on Wall Street since October has put world stocks on course for their worst week since before Trump's election in November, although many analysts continue to cast the decline as simply a consolidation after months of gains.
The White House's ability to get legislation through Congress is crucial to "Trumpflation" bets on fiscal stimulus, tax cuts and capital repatriation that markets late last year assumed would drive inflation and growth higher.
European stock markets dipped on opening FTEU3 and the dollar dropped back into negative territory against the euro after Republicans abandoned plans to vote on the healthcare bill on Thursday night is still a risk that the vote fails today, (and) there are numerous other uncertainties that suggest anything but a smooth course ahead for implementing the much anticipated tax reform reflation programme," said MUFG currency strategist Derek Halpenny, in London.
"We still expect a much smaller tax cutting programme simply due to the inability to agree on how a large program could be financed. The Trump reflation trade could still reverse course in a more meaningful way, resulting in dollar weakness."
Stocks and the euro took some heart from purchasing manager surveys in France and Germany, both far stronger than forecast and again pointing to a European economy finally emerging from years of crisis and stagnation.
By 0850 GMT, the euro was up 0.2 percent at $1.0820 EUR=EBS , helping push the dollar around 0.1 percent lower against the basket of currencies used to measure its broader strength. .DXY
The MSCI world equity index .MIWD00000PUS , which tracks shares in 46 countries, was flat at 447.61.
The dollar did recover some ground against the yen, however, after U.S. Treasury yields inched higher in Asian time, halting an eight-day losing streak that is its worst since the end of 2010.
Bank of Japan Governor Haruhiko Kuroda told a Reuters event on Friday that there was "no reason" to raise the bank's bond yield targets now with inflation so far from its 2 percent target sell-off in a number of commodities markets has also been a factor in the weakness of share prices this week. Iron ore prices fell for a fourth day on Friday and are on course for their worst week since December.
Crude inched higher, supported by a fall in Saudi exports to the United States, but remained under pressure from a glut of supply that OPEC curbs has broadly failed to stem.
Thomson Reuters data shows OPEC shipments to Asia, the world's biggest and fastest-growing oil-consuming region, are up more than 5 percent since January, suggesting the group of producers is shielding its main customers from the reductions.
Unless OPEC extends the curbs beyond June or makes bigger cuts, traders say oil prices are at risk of falling further.
"OPEC's goal of drawing down inventories to normal levels is not going to be reached before their agreement expires on June 30," said U.S. investment bank Jefferies in a note to clients.
For Reuters Live Markets blog on European and UK stock markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets (Editing by Larry King)