* Trump's steel, aluminum tariffs may exempt Canada, Mexico
* Upbeat U.S. labor cost, private jobs data offset Cohn exit
* Fed's Beige Book shows moderate U.S. growth with risingwages
* Trade-weighted euro index touches highest since Sept 2014
By Richard Leong
NEW YORK, March 7 (Reuters) - The dollar was little changed on Wednesday against a basket of currencies as traders await details on U.S. President Donald Trump's proposed tariffs on steel and aluminum, which have touched off fears of a global trade war.
The White House said late Wednesday that Canada, Mexico and possibly other countries may be exempted from the tariffs on the basis of national security. The dollar pared gains in late U.S.trading following that news, while the Canadian dollar CAD= and Mexican peso MXN= trimmed their losses versus the greenback. dollar was weaker earlier in the day following the resignation of Trump's top economic adviser, Gary Cohn, who was regarded as a bulwark of economic orthodoxy and had told Trump that markets would slump on a tariffs threat. far the reaction has been muted," Sireen Harajli, currency strategist at Mizuho in New York, said of the dollar.Cohn's "resignation has signalled higher risk of a trade war."
Cohn's departure comes against the backdrop of steps by theTrump administration to assert protectionist policies, including withdrawing the United States from the Trans-Pacific Partnership, instigating a renegotiation of the North AmericanFree Trade Agreement and imposing hefty import tariffs on some targeted products.
Nevertheless, doubts among traders have persisted about howbroadly Trump would apply this protectionist move, if at all.
A White House official said Trump hopes to sign the tariffson Thursday afternoon. index that tracks the dollar versus six currencies .DXY fell 0.042 points or 0.05 percent, to 89.576
The dollar's bounce was stoked by data on domestic privatehiring and labor costs that reinforced the view of underlyingstrength in the U.S. economy. However, those figures weremitigated by a larger-than-forecast widening of the U.S. tradedeficit in January. Federal Reserve in its Beige Book of regional econmicconditions suggested the U.S. expansion has continued with signsof wage growth accelerating since mid-January. anxiety about a deterioration in global trade limitedthe dollar rebound with some traders favoring the yen as a safehaven, analysts said.
"We therefore see the latest news as an additional reason toremain cautious on the outlook for the broad dollar," GoldmanSachs economists Zach Pandl and Karen Reichgott wrote in aresearch note.
Against the yen, the dollar JPY= was down 0.06 percent, at106.05 yen. It held just above a 14-month low of 105.23 yen setlast week, Reuters data showed.
Ahead of an European Central Bank policy meeting onThursday, the euro EUR= was last up 0.07 percent, at $1.2411
The trade-weighted euro index EUREER=ECF hit 100.2565, thehighest level since September 2014.
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http://reut.rs/2CSTWkvWorld FX rates in 2018
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