GBP/USD Inches Higher, Tax Reform Optimism Fails To Lift Dollar
The dollar fell against a basket of major currencies on Monday as bullish housing data and growing optimism that a final tax bill will reach President Donald Trump’s desk by the end of the week failed to lift sentiment.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell 0.38% to 93.11.
The National Association of Home Builders' index showed homebuilder sentiment rose to 74 in November, the highest reading since 1999. That beat economists’ forecasts for a reading of 70, fuelling investor optimism on the housing sector.
Reuters reported, citing aides, that the Republican lawmakers are expected to vote on tax legislation on Tuesday, aimed at overhauling the U.S. tax system. That however, failed to spur a rebound in the dollar, as investors mull over the real-world impact of tax reforms.
Also weighing on the dollar was strong gains in the both the euro and pound amid easing political uncertainty, and signs of progress on brexit talks, respectively.
GBP/USD rose 0.59% to $1.3401 shrugging off recent comments from European Commission president Jean-Claude Juncker, who warned last week that the next phase of Brexit negotiations would be "harder".
EUR/USD added 0.37% to $1.1793, as investors cheered reports that German Chancellor Angela Merkel was making progress on her push to form a coalition government with the Social Democratic Party (SPD) despite the latter warning Merkel its members "need to be convinced".
USD/JPY fell 0.14% to Y112.44, while USD/CAD fell 0.07% to $1.2856 as falling oil prices weighed and the Bank of Canada’s somewhat cautious stance on monetary policy tightening continued to cap gain in the loonie