Possible delay in the US tax reform sent the dollar to a weekly bottom

November 9, 2017 1:02 pmComments Off on Possible delay in the US tax reform sent the dollar to a weekly bottomViews: 65

US tax reformThe possible delay in the US tax reform sent the dollar to a weekly bottom against the Japanese yen. The speech of the Republican Paul Ryan in the Senate’s House of Representatives has left many loopholes for slowing the enormous tax reform, predicting a nearly double reduction in corporate tax.

The dollar declined by 0.14% against the yen and reached 113.84 JPY per USD, marking a session bottom of about 113.4 JPY. Any delays or concessions on tax cuts will work against the US currency.

Although most traders agree that the December’s interest rate increase is fully reflected in the price, there is uncertainty about monetary policy in 2018, in which the Fed provides for 3 interest rate hikes. The uncertainty comes from the recent economic data and still fragile inflation, but also largely the new Fed leadership, headed by Jerome Powell, who is still considered the closest member of the Fed to Janet Yellen.

On Wednesday, the dollar index fell 0.05% to 94.86 points and the Canadian dollar was well ahead of US dollar, supported by the more aggressive comments by Canadian bank chairman Stephen Poloz. The dollar was best performing against the pound, which was negatively impacted by doubts about Theresa May’s Brexit deal for the UK.

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