Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

FOREX-Dollar weakens on U.S. tax reform worries

Published 2017-11-08, 03:18 p/m
Updated 2017-11-08, 03:20 p/m
© Reuters.  FOREX-Dollar weakens on U.S. tax reform worries

© Reuters. FOREX-Dollar weakens on U.S. tax reform worries

* Dollar slips vs yen, euro

* Report of possible delay in U.S. corp tax implementation weighs (Updates prices, market activity; adds analyst's comments)

By Saqib Iqbal Ahmed

NEW YORK, Nov 8 (Reuters) - The dollar slipped to a more than one-week low against the yen on Wednesday, pressured by worries over possible delays to President Donald Trump's tax reform plans.

U.S. House of Representatives Speaker Paul Ryan on Wednesday left the door open to a possible delay in implementing a huge corporate tax cut, following a Washington Post report that his fellow Republicans in the Senate are exploring the option. potential delay in the implementation of tax cuts, or the possibility of proposed reforms being watered down, would tend to work against the U.S. currency, analysts said.

"Anyone who has been long the dollar has been really vulnerable to headlines. We have seen a lot of traders leave the party on any sort of inkling of bad news," said Lennon Sweeting, chief market strategist at XE in Toronto.

The dollar was down 0.19 percent to 113.78 yen, after having fallen as low as 113.4 yen, earlier in the session.

The dollar index .DXY , which tracks the greenback against six major currencies, was down 0.04 percent at 94.875.

"I think it is to do with uncertainty surrounding the path towards tax reform," said Vassili Serebriakov, FX Strategist at Credit Agricole (PA:CAGR) in New York.

"In terms of data, it is very quiet this week. The December (interest rate) hike is fully priced in but there is a lot of uncertainty about next year, especially with the composition of the FOMC," he said, referring to U.S. central bank's policy-setting Federal Open Market Committee.

On Monday, the Federal Reserve Bank of New York confirmed that William Dudley, among the most influential monetary policymakers throughout the financial crisis and its aftermath, expects to retire by mid-2018.

That raised another question over leadership at the central bank, less than a week after Trump chose a new Fed chief.

"It is difficult for markets to trade the Fed at the moment, so that kind of leaves most of the focus on tax reform," Serebriakov said.

The British pound weakened against the dollar, weighed down by a spiraling political drama in Westminster and growing doubts over Prime Minister Theresa May's ability to deliver a good Brexit deal. Canadian dollar strengthened against its U.S. counterpart, adding to its gains after comments by Bank of Canada Governor Stephen Poloz the day before that were less dovish than investors had expected.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.