Trump Tax Plan Sends Dollar Higher
The dollar was trading higher against most of its primary trading partners on Thursday morning after U.S. President Donald Trump proposed the biggest U.S. tax overhaul in thirty years. Skeptics immediately voiced concern that the plan could increase the country’s deficit and that it will favor businesses and the wealthy. Trump claimed that the plan is aimed at helping the working class, simplifying the tax code and making tax laws fairer for everyone. No information was provided about how the plan would or could be implemented without increasing the budget deficit and adding to the nation’s existing $20 trillion national debt.
Despite the plan’s unveiling on Wednesday, it has a long way to go before being turned into law. It must first become legislation, a development which is unlikely until after Congress proceeds with the 2018 budget. Then it must be debated by congressional tax-writing committees. Republicans are hoping to pass the proposal into law by the end of 2018 in order to solidify a victory for their party in 2017, but skeptics are concerned that the red-tape surrounding the proposal will delay the passing until 2018.
The dollar index was up 0.14 percent as of 12:47 p.m. HK/SIN, trading at 93.58 .DXY. The dollar gained 0.2 percent against the yen, to trade at 113.02. The euro continued to ease against the greenback, trading down 0.09 percent to $1.1732.
Asian indexes were mixed in Thursday trade, failing to catch the excitement felt by U.S. traders after Trump’s announcement. Japan’s Nikkei 225 index was up 0.50 percent just after midday, but Hong Kong’s Hang Seng index was down 0.31 percent. South Korea’s Kospi was also down a modest 0.05 percent. The Dow Jones Industrial Average, the S&P 500 and the Nasdaq composite all ended higher on Wednesday.