U.S. Dollar Weakens On Tax Reform Woes
November 20 2017 - 1:23AM
RTTF2
The U.S. dollar dropped against its major rivals in the European
session on Monday, amid lingering uncertainty over the progress of
tax reform in the U.S.
Although the House of Representatives passed the tax reform bill
last week, the legislation face tougher fight in the Senate as the
GOP controls the chamber by just 52-48. The Senate law makers are
planning to vote on their version of the tax bill when they return
from Thanksgiving recess. Speaking to ABC's "This Week," Senator
Susan Collins said that she had not reached a conclusion on voting
to tax plan passed by the Senate Finance Committee on Thursday.
Meanwhile, U.S. President Donald Trump would not insist on
including repeal of the individual health care mandate in a bill
intended to enact the biggest overhaul of the tax code since the
1980s, Office of Management and Budget Director Mick Mulvaney said
Sunday. Sentiment faded amid a political impasse in Germany after
preliminary coalition talks collapsed.
"It is a day of deep reflection on how to go forward in
Germany," Chancellor Angela Merkel told reporters after her efforts
to form a three-way coalition government have failed.
The minutes from the Fed's latest policy meeting are due
Wednesday, while minutes from the European Central Bank's October
meeting are due Thursday.
The greenback showed mixed performance in the Asian session.
While the currency held steady against the franc and the pound, it
fell against the yen. Against the euro, it rose.
The greenback weakened to 1.1809 against the euro, off its early
6-day high of 1.1722. If the greenback slides further, 1.19 is
possibly seen as its next support level.
Data from Destatis showed that Germany's producer price
inflation eased in October, in line with expectations.
The producer price index climbed 2.7 percent year-over-year in
October, slower than the 3.1 percent rise in September.
The greenback dropped to 1.3279 against the pound, its lowest
since November 2. Continuation of the greenback's downtrend may see
it challenging support around the 1.34 area. The greenback edged
down to 0.7574 against the aussie and 1.2755 against the loonie,
from its early highs of 0.7550 and 1.2802, respectively. Further
downtrend may see the greenback challenging support around 0.78
against the aussie and 1.26 against the loonie. The greenback
weakened to 0.6840 against the kiwi and held steady thereafter. The
greenback is seen finding support around the 0.695 region. On the
flip side, the greenback bounced off to 0.9898 against the franc,
from its prior low of 0.9879. The next possible resistance for the
greenback is seen around the 1.00 area. The greenback held steady
against the yen, after having dropped to a multi-week low of 111.89
early in the Asian session. The pair finished last week's trading
at 112.09. Data from the Ministry of Finance showed that Japan
recorded a merchandise trade surplus of 285.385 billion yen in
October.
That was shy of expectations for a surplus of 330.0 billion yen
and was down from 670.17 billion yen in September.
Looking ahead, the European Central Bank President Mario Draghi
testifies on the economy and monetary policy before the European
Parliament Economic and Monetary Affairs in Brussels at 9:00 am
ET.
U.S. leading index for October is due in the New York
session.
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