Forex — Dollar higher vs. other majors with eyes on U.S. tax plan


© Reuters. Dollar remains supported vs. rivals as U.S. fiscal reform hopes support

Investing.com — The dollar was higher against other major currencies on Friday, supported by hopes for an upcoming U.S. fiscal plan and a December rate hike by the Federal Reserve, while investors still awaited the release of U.S. data due later in the day.

The greenback was boosted after U.S. President Donald Trump unveiled a plan on Wednesday calling for lower tax rates for businesses and individuals as part of a comprehensive overhaul of the U.S. tax code.

Gain’s were capped however as the proposal still faces an uphill battle in the U.S. Congress, with the Republican Party divided over it and Democrats hostile.

Sentiment on the U.S. dollar also remained supported since Fed Chair Janet Yellen called for gradual rate hikes in a speech on Tuesday.

Market participants were looking ahead to the release of U.S. reports on personal spending and consumer sentiment due later Friday, for further indications on the strength of the economy.

EUR/USD eased 0.08% to 1.1777, while GBP/USD slid 0.22% to trade at 1.3412.

The pound had strengthened after UK Brexit Secretary David Davis said «considerable progress» had been made in talks.

However, European Union chief negotiator Michel Barnier warned that Britain was “months” away from being able to negotiate a future trade deal, with huge divisions still remaining between the UK and the EU.

Elsewhere, the yen was lower with USD/JPY gaining 0.35% to 112.68.

Earlier Friday, data showed that Japan’s industrial production increased by 2.1% in August, beating analysts’ expectations.

Household spending rose less than expected in August, with an annualized gain of 0.6%.

A separate report showed that Japan’s consumer price index rose 0.7% last month, in line with expectations.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.14% at 93.08 by 02:25 a.m. ET (06:20 GMT), just off Thursday’s one-month peak of 93.50.

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