* Graphic: World FX rates in 2017 tmsnrt.rs/2egbfVh
By Saikat Chatterjee
LONDON, Nov 6 (Reuters) - The dollar steadied on Monday after posting its biggest weekly rise so far this year as wariness about U.S. tax reform plans and a spike in oil prices to two-year highs prompted investors to take profits.
The dollar briefly popped to an eight-month high against the Japanese yen in Asian trade but, with last week’s U.S. jobs data having been relatively underwhelming, London-based traders were a bit more cautious.
“There is some ongoing adjustment in market expectations on the dollar’s outlook on the progress of the U.S. tax bill and on the ongoing Saudi situation but market moves have been in narrow ranges,” said Alberto Gallo, head of macro strategies at Algebris Investments in London.
Risk sentiment was also on the back foot after oil prices jumped to their highest in over two years on Monday as Saudi Arabia’s crown prince cemented his power through a crackdown on corruption.
Investors were, however, wary of selling the greenback aggressively with the passage of the U.S. tax bill due this week.
Facing pockets of discontent in their own Republican ranks, tax negotiators in the U.S. House of Representatives will seek this week to bridge differences over their far-reaching tax bill and stick to a self-imposed deadline of passage this month.
JP Morgan strategists said the release of the bill hasn’t shed any light on how the various constraints and tradeoffs will be resolved nor when the actual passage of the tax bill will be.
The dollar rose as high as 114.89 yen at one point, its highest since mid-March, gaining steam after breaching technical resistance at levels near 114.07 yen.
Against a broader trade-weighted basket of its rivals <.DXY<, the dollar was flat at 94.912 on Monday after rising 1.3 percent last week, its biggest weekly rise of the year.
The dollar’s jump in early trades was also aided by positioning data. Net short dollar positions have dwindled to their smallest in four months with outstanding dollar shorts now at $3 billion compared to $18 billion at end-September, according to latest CFTC data.
Bond markets were, however, warning that the U.S. economy may be in the midst of a late cycle rally despite robust equity markets, with the spread between two- and 10-year U.S. yields at their narrowest in more than a decade.
The euro was flat at $1.16015.
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
Reporting by Saikat Chatterjee; editing by Emelia Sithole-Matarise