Dollar Trickles Lower on Fears of Delay to Corporate Tax Cut
The dollar traded lower against basket of major currencies on Thursday amid fears the Senate would derail President Donald Trump’s tax reform plan after news surfaced that the Senate would delay corporate tax cuts until 2019.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell by 0.43% to 94.36.
Senate Republicans on Thursday plan to propose delaying a cut in the corporate tax rate from 35% to 20% until 2019, The Washington Post reported on Thursday, citing four people briefed on the planning. The move to delay corporate tax represents a significant shift from President Donald Trump’s view that immediate tax cuts are needed to stimulate the economy.
Also weighing on the dollar was a report showing weakness in the labor market after initial jobless claims rose more than expected last week.
The U.S. Department of Labor reported Thursday that initial jobless claims increased 10,000 to a seasonally adjusted 239,000 for the week ended Nov. 4, above forecasts of a 2,000 increase to 232,000.
In Europe, the euro rose sharply against the dollar after the European Commission revised up growth forecast for the Eurozone this year but lowered next year’s growth estimates.
USD/JPY fell 0.57% to Y113.23 following sharp sell-off in Asian equities overnight.
USD/CAD fell 0.34% to C$1.2685 as a move higher in oil prices helped support the loonie.
GBP/USD added 0.17% to $1.3138 but the pair remained under pressure, however, amid concerns that brexit negotiations are starting to sour