@Forex - Dollar near 1-Month Highs amid U.S. Tax Reform Hopes(28/09/2560)

28 Sep 2017
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Investing.com - The dollar rose to one-month highs against a basket of the other major currencies on Thursday amid fresh hopes for U.S. tax reforms and after strong economic data supported the case for a Federal Reserve rate hike later this year. The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.17% to 93.44 by 03:28 AM ET (07:28 GMT), the highest since August 23. The dollar was boosted after the Trump administration outlined plans for a sweeping overhaul of the U.S. tax code on Wednesday, proposing tax cuts on businesses and many individuals. The proposed changes are likely to face an uphill battle in Congress amid concerns that they could add trillions of dollars to the deficit. But progress on the tax plan, along with data showing a strong rebound in orders for long-lasting U.S. factory goods last month bolstered the dollar, which has been buoyed by renewed expectations for a third rate hike by the Fed this year. Higher rates tend to boost the dollar by making the U.S. currency more attractive to yield-seeking investors. The dollar was higher against the yen, with USD/JPY rising 0.17% to 113.03, not far from Wednesday’s more than two-month highs of 113.24. The euro remained close to five-week lows amid concerns over political risk in Germany in the aftermath of weekend elections, with EUR/USD last at 1.1742. Chancellor Angela Merkel is facing what could be a protracted period of coalition talks to try to form a stable government, leaving investors’ worries that political uncertainty could hit the Germany economy and make closer euro zone integration more difficult. Elsewhere, sterling was steady against the stronger dollar, with GBP/USD at 1.3382. Source: investing.com (27/09/2017)

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