Dollar Down A Tad After Snag In US Tax Bill Passage, Kiwi Up After Trade
The dollar weakened slightly in Asia on Wednesday after a procedural hurdle caused a snag in the Senate vote on US tax cuts though the bills is still expected to reach President Trump's desk this week.
The Bank of Japan debates monetary policy in a two-day meeting with expectations its ¥80 trillion asset purchase plan will remain intact and there may be some fresh language on the outlook for inflation.
Elsewhere, New Zealand reported its current account for the third quarter with a deficit of NZ$4.68 billion, compared to a deficit of NZ$4.29 billion seen on quarter and a gap of NZ$7.10 billion compared with NZ$6.90 billion expected on year. As well, the trade balance for November came in at a deficit of NZ$1.193 billion on month, compared with a NZ$550 million expected.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was last quoted down 0.19% to 93.05.
Overnight, the dollar was roughly unchanged against a basket of major currencies on Tuesday as investors awaited the outcome of the US congress vote on the tax bill.
Congress is expected to begin voting Tuesday on a tax bill which proposes the biggest changes to the U.S. tax system in more than three decades. The House of Representatives vote is slated for Tuesday afternoon, while the Senate vote expected to follow later.
The vote comes amid growing expectations that the tax bill will pass after Senators Mike Lee and Susan Collins signaled their support for the bill.
That, however, has failed to lift the dollar with some market participants suggesting the potential benefits of tax reform on the economy have largely been priced in, while others questioned the extent to which lower taxes would lift the economy.
Better-than-expected housing data, meanwhile, limited losses in the greenback, raising expectations for ongoing solid U.S. economic growth.
The Commerce Department said on Tuesday that single-family homebuilding, which accounts for the largest share of the housing market, rose 5.3% to a rate of 930,000 units. That was the highest level since September 2007.
The euro added to gains against the greenback, rising 0.54% to $1.1846 as investors remained optimism that German Chancellor Angela Merkel would be able to form a coalition government with the Social Democrats.