* Dollar steadies after rough week, inches up vs yen
* Expectations of pro-growth message from Trump news
* Also eyed for signs of protectionism, concerns over dollar
(New throughout after start of European trade)
By Patrick Graham
LONDON, Jan 11 The dollar inched higher against
the yen on Wednesday but was steady against the basket of
currencies used to measure its broader strength as investors
awaited U.S. President-elect Donald Trump's first formal news
The dollar has gained broadly since Trump's victory in
November as investors bet he would boost public spending and
spur repatriation of overseas funds by U.S. companies, policies
expected to bring higher inflation and interest rates.
But more doubts have emerged in recent weeks about that
narrative, and investors will have a close eye on what the new
president says about trade and relations with China.
"The dollar is still holding up quite well and there is a
presumption that we are going to get support from tighter
monetary policy and looser fiscal policy," said Jeremy Stretch,
head of currency strategy at CIBC in London.
"Overall we're still constructive but it does look more a
case of playing the end of the rally before we see a correction
later this year."
The dollar index was roughly steady at 102.04, in the middle
of a range it has held for the past week and off a 14-year peak
of 103.82 hit on Jan. 3 . Against the yen, it rose 0.1
percent to 115.92 yen, nearly 3 percent off almost one-year
highs hit in December.
The euro was steady at $1.0556 after brushing a
10-day high of $1.0628 overnight.
Trump's news conference is due to start at around 11:00 EST
"The less market positioning friendly policies (are) a
strong focus on trade tariffs or perhaps more importantly if he
talks about a weaker dollar policy," Nomura analyst Jordan
Rochester wrote in a note for clients.
"We wouldn't be surprised to see 113.50 to 114 yen over
coming weeks if he moves in this policy direction so soon. If he
directly comments on a weaker dollar policy, the adjustment
could be more (like) 110 to 112 in coming weeks."
Expectations that the Trump administration would enact
economic stimulus measures backed by massive fiscal spending
have taken Wall Street to record highs and U.S. debt yields to
levels unseen since 2014.
Against that backdrop, financial markets are keen to see how
Trump will follow through on campaign pledges.
"The dollar is set to resume the Trump rally if he provides
specifics of stimulus measures, notably those related to tax
cuts, which appear achievable," said Junichi Ishikawa, senior FX
strategist at IG Securities in Tokyo.
(Additional reporting by Shinichi Saoshiro; Editing by Mark