U.S. Republican Senators delayed the long-awaited healthcare bill vote on Tuesday causing Wall Street to close broadly lower and sending ripples of nervousness throughout the global stock markets on Wednesday morning.
Japan’s Nikkei 225 was down 0.35 percent and Hong Kong’s Hang Seng Index was down 0.36 percent on Wednesday afternoon in Asia. MSCI’s broadest index of shares outside Japan was down 0.4 percent, retreating further from two-year highs hit on Monday.
The decision to delay the healthcare vote was spearheaded by Senate Republican leader Mitch McConnell who noted the need to wait until after the July 4th Independence Day holiday in order to earn more votes for the bill’s passage. In its current version the healthcare bill would repeal Obamacare taxes, gradually cancel Medicaid’s expansion program and restructure subsidies to insured Americans. According to the Congressional Budget Office, the bill could leave nearly 23 million people uninsured by 2020. A failure to pass this momentous (and highly contentious) healthcare bill would show a weakness in U.S. President Donald Trump’s ability to ush through his agenda and will call into question whether he will be able to implement his other campaign promises such as an increase in infrastructure spending.
Currency Movements
The dollar slipped against the yen on Wednesday morning, down to 112.09 at 5:54 a.m. GMT, a 0.20 percent slide after hitting a one-month high of 112.285. The euro gained 0.09 percent after European Central Bank Chair Mario Draghi commented that the ECB could adjust its policy tools as the European economy strengthens. The euro hit a ten-month high against the dollar after Draghi’s statement in Portugal yesterday. Other European currencies also traded higher, with the Danish krone and the Swiss franc posting gains during Wednesday’s Asian session.