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Dollar Holds Steady Amid Tax Reform Jitters

11/9/2017, 10:02:46 AMTrading Strategies
Dollar Holds Steady Amid Tax Reform Jitters

The dollar held steady near four-month highs against other major currencies in quiet trade on Wednesday, as investors awaited fresh information on the fate of a U.S. tax reform bill.

Sentiment on the greenback remained vulnerable following reports that a key corporate tax cut currently under discussion in U.S. tax reforms plans could be delayed for one year.

The Washington Post reported on Tuesday that Senate Republican leaders are thinking of postponing the implementation of the major corporate tax cut to comply with Senate rules.

The U.S. dollar had been supported in recent session by hopes the U.S. administration's tax cuts could boost the economy.

Market participants were also following U.S. President Donald Trump's Asia tour. Trump arrived in South Korea on Tuesday after meeting with Japan Prime Minister Shinzo Abe over the weekend.

In an address to the South Korean parliament on Wednesday, Trump addressed tensions with North Korea, saying that it "has interpreted America's past restraint as weakness."

"This would be a fatal miscalculation. This is a very different administration than the United States has had in the past," he added.

Donald Trump is the first U.S. president to speak before South Korea's parliament since Bill Clinton in 1993. The U.S. president is scheduled to continue his tour in China later on Wednesday.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was steady at 94.77 by 10:45 a.m. ET (14:45 GMT), still close to the previous session's four-month high of 95.07.

The euro edged higher, with EUR/USD up 0.09% at 1.1597, while GBP/USD dropped 0.52% to 1.3096.

Elsewhere, USD/JPY was down 0.36% at 113.59, while USD/CHF held steady at 1.0000.

The Australian and New Zealand dollars were stronger, with AUD/USD up 0.43% at 0.7675 and with NZD/USD gaining 0.42% to 0.6928.

Market participants were looking ahead to the Reserve Bank of New Zealand's rate decision, due on Thursday.

Meanwhile, USD/CAD slid 0.31% to 1.2741 after Statistics Canada reported that building permits increased 3.8% in September, confouding expectations for a 0.2% fall.

Another report showed that housing starts increased by 222.800 units last month, surpassing expectations for a 210,000 rise.