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2017-11-07 18:51:28

The dollar pushed higher against a basket of the other major currencies on Tuesday as investors continued to monitor the progress of the U.S. tax bill, while the euro fell to the lowest level in three months.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.37% at 94.97 by 03:57 AM ET (08:57 AM GMT).

Demand for the dollar continued to be underpinned by expectations that the Federal Reserve is on track to raise interest rates in December for a third time this year after strong U.S. factory and service sector data last week backed the case for continued policy tightening.

Investors were waiting to see how Republicans would reconcile differences over their proposed tax bill that, if enacted, would be the biggest overhaul of the U.S. tax system since the 1980s.

It would also be the first major legislative achievement since Republicans took control of the White House and Congress in January, but doubts remain over the scale of borrowing needed to finance the bill and the timetable for its passage this month.

Investors were also watching the progress of U.S. President Donald Trump's visit to Asia.

The dollar was higher against the yen, with USD/JPY rising 0.46% to 114.21, re-approaching the high of 114.73 struck the previous day, its strongest since mid-March.

The dollar’s gains against the yen reflected diverging monetary policy in Tokyo and Washington a day after Bank of Japan governor Haruhiko said the bank’s easy monetary-policy stance would continue for some time to come.

The euro fell against the firmer dollar, with EUR/USD down 0.36% to 1.1567, the lowest level since mid-July.

The euro has remained on the back foot since the European Central Bank said late last month that it is extending its bond purchases into September 2018.

Sterling was also lower against the firmer dollar, with GBP/USD sliding 0.2% to 1.3143.

The Australian dollar was lower, with AUD/USD down 0.38% to 0.7663. The Aussie briefly ticked higher earlier after the Reserve Bank of Australia kept rates on hold and sounded less dovish than anticipated at its policy meeting.

The New Zealand dollar was weaker, with NZD/USD down 0.33% to 0.6922.

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