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Dollar gains in Asia as U.S. showdown looms on healthcare vote

3/24/2017, 9:56:27 AMMarket Analysis
Dollar gains in Asia as U.S. showdown looms on healthcare vote

The dollar held gains in Asia on Friday as a dramatic inter-party showdown loomed in the U.S. as the votes needed to replace the Obama-era healthcare law fell short on Thursday and President Donald Trump's office said he was "done negotiating" and wanted an up-or-down decision on Friday.

Republican leaders failed to rally enough support to pass the GOP bill in a planned Thursday vote in the House. At a Republican House caucus meeting Thursday night, Office of Management and Budget Director Mick Mulvaney said that if Trump does not get a vote on the proposal, he will move on to other priorities and leave the ACA, also known as Obamacare, in place.

Earlier, House Majority Leader Rep. Kevin McCarthy told CNN that House debate on the bill will start Friday morning. Later, House Speaker Paul Ryan issued a terse statement: "We have been promising" this, and "tomorrow we're proceeding." Members of the Freedom Caucus, Republican legislators, however vow to vote "no."

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.10% to 99.66. USD/JPY changed hands at 111.23, up 0.27% as Prime Minister Shinzo Abe faces a scandal at home related to his wife's work on schools.

AUD/USD traded at 0.7638, up 0.14%, while GBP/USD easded 0.14% to 1.2503.

Overnight, the dollar steadied against a basket of major currencies on Thursday, after the release of mixed economic data while investors waited the word on an Obamacare replacement.

The Commerce Department said on Thursday new home sales increased 6.1 % to a seasonally adjusted annual rate of 592,000 units last month compared to expectations of a 0.7% increase to 565,000 units.

Elsewhere, initial jobless claims increased by 15,000 to 258,000 in the week ending March 18 from the previous week’s revised total of 243,000 against analysts’ expectations of a drop by 1,000 to 240,000.

President Trump’s efforts to push through this bill is seen by financial markets as a crucial test of his ability to deliver on his legislative agenda, which includes tax reform.

Meanwhile, the pound rose to a four-week high against the dollar, buoyed by better than expected retail sales data.

Core retail sales, which exclude automobile sales and fuel, increased by 1.3% in February, confounding expectations for a 0.4% rise.