The US Dollar Index fell on Monday trading, largely as a result of cautious optimism that Donald Trump’s tax reform bill could be moving closer to ratification. While on Friday the bill had passed the negotiating committee, there is now some uncertainty as to whether it can be enacted as there has been spirited disagreement that the overhaul would have the pro-growth impact that Republicans seem to believe it would. The bill, in its current form, gives major rate cuts to wealthy individuals and corporations with significantly fewer breaks for middle and lower class income brackets. The US Dollar Index, as a result, fell to 93.800 .DXY, a decline of 0.20%.
As reported at 10:33 am (GMT) in London, the EUR/USD was trading at $1.18, a gain of 0.38% and establishing a new session peak; struck earlier, the pair’s session low is at $1.17360. The GBP/USD was trading at $1.3354, up 0.27% and not far from the session high of $1.3363; the low on the trading day is at $1.3308.
Government Shutdown Threat Dampens Dollar Enthusiasm
Also putting pressure on the greenback is the possibility of a looming Federal government closure if a new budget is not signed. One currency strategist in Tokyo says that until such time that a closure threat and the tax reform battle are averted the Dollar will be hard-pressed to rise. In terms of fundamentals that could drive the greenback, most of the week has generally low-impact data until Friday when personal and core personal consumption expenditures figures are released for November. Experts are currently predicting a slight decline in the numbers.