Investing.com – The dollar rose against a basket of currencies on Wednesday as ongoing optimism over the progress of tax reform and easing concerns about a possible U.S. government shutdown lifted sentiment.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.31% at 93.56.
The dollar shrugged off President Donald Trump’s comments Wednesday that a government shutdown "could happen" as soon as Saturday, as market participants downplayed the likelihood of shutdown.
Amherst's Stephen Stanley said the current plan is reportedly for Congress to pass a two-to-three-week extension, which would avert the possibility of a government shutdown on Saturday.
Also adding to positive sentiment on the greenback was ongoing investor optimism that the final tax bill will reach President Donald Trump for approval before year-end, as the Senate and House of Representatives are set to get talks underway this week to reconciled their respective bills.
The tax cuts, widely viewed as inflationary, are expected to provide a fiscal lift to the US economy, boosting the dollar.
Investors, meanwhile, cheered a better-than-estimated report on private sector job creation, which often serves as a precursor to monthly nonfarm payrolls data slated for later this week.
Private payrolls grew by 190,000 for the month, according to a report released Wednesday by ADP and Moody's Analytics. That beat economists’ forecast of 185,000.
GBP/USD fell 0.52% to $1.3373, as the pair continued to come under pressure amid reports suggesting Brexit talks were unlikely to be resumed this week after talks with the Democratic Unionist Party (DUP) were delayed.
EUR/USD fell 0.28% to $1.1791, while EUR/GBP rose 0.19% to £0.8819.
USD/CAD surged 0.86% to $1.2796 amid a somewhat dovish statement from the Bank of Canada after the central bank left interest rates unchanged at 1%.
USD/JPY fell 0.33% to Y112.24, while the USD/CHF rose 0.31% to 0.9904.