US Dollar Gains As Senate Passes Tax Bill, Asia Stocks Mixed
- The US Dollar gained on news that the Senate had passed its version of Republican tax reform
- The British Pound was as ever fixed on Brexit talks
- Regional equity had a mixed session, with the Nikkei 225 ending lower
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The US Dollar was broadly higher in Asian trade Monday following weekend news that the US Senate had approved a raft of tax reforms.
This moves Donald Trump and the Republican party a big step closer to what would be the largest change to Federal tax law for nearly 40 years. The Dollar has tended to rise on any progress for the legislation as investors anticipate that tax cuts for corporations will stimulate the economy. Talks will now probably begin this week between House and Senate to reconcile their bills.
The US Dollar rose against the Japanese Yen, with rising Treasury yields also helping. The Euro slipped little against the US currency too. The British Pound fell back a little as focus remains on Brexit negotiations. UK Prime Minister Theresa May will meet with European Union negotiators on Monday.
Asia Pacific equity got the week’s trading off to a mixed start despite the ostensible good news from the US. Japan’s Nikkei 225 was down 0.47%, with falls for large-cap staples reportedly offsetting retail-stock gains. The ASX 200 was down too, but only just. Shanghai stocks fell but there were gains for the Kospi and the Hang Seng. Crude oil prices fell on last week’s news that US drillers had added to their numbers of operational rigs, while Gold prices slid back with a stronger Dollar.
The remainder of the session offers US durable-goods and factory order data, along with the UK's construction Purchasing Managers Index.
--- Written by David Cottle, DailyFX Research
Contact and follow David on Twitter: @DavidCottleFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.