U.S. Dollar Falls On Tax Reform Concerns

The U.S. dollar weakened against its major counterparts in early European deals on Friday, as investors fret over the passage of the U.S. tax reform bill in Senate, after two Republican Senators raised opposition to the tax bill.

Republican Senators Marco Rubio and Mike Lee sought for changes to child tax credits to vote for the bill, putting the Republican plan to pass the legislation by next week in trouble.

Rubio said that he would not back the Republican tax reform bill unless the bill’s proposed refundability to taxpayers of the child tax credit is increased.

With Republicans holding tight margins of 52-48 seats in the Senate, opposition from Rubio triggered doubts over the smooth passage of the bill in the Senate.

The tensions came a day after House and Senate Republican leaders reached a deal on final tax legislation on Wednesday.

Reversing from an early 2-day high of 1.1765 against the euro, the greenback dropped to 1.1799. If the greenback extends decline, 1.185 is likely seen as its next support level.

Figures from Eurostat showed that the Eurozone trade surplus declined to a three-month low in October as exports dropped amid an increase in imports.

The trade surplus fell to a seasonally adjusted EUR 19 billion in October from EUR 24.5 billion in September. This was the lowest since July. The surplus was forecast to decline to EUR 24.3 billion.

The greenback edged down to 0.9873 against the franc, compared to 0.9890 hit late New York Thursday. Continuation of the greenback’s downtrend may see it challenging support the 0.97 level.

The greenback weakened to a 9-day low of 112.03 against the yen, from Thursday’s closing value of 112.38. The next possible support for the greenback is seen around the 111.00 region.

Quarterly Tankan survey from the Bank of Japan showed that confidence among Japanese large manufacturers increased for the fifth straight quarter to an 11-year high at the end of 2017, as strong exports and rising corporate profits underpin activity.

The large manufacturers’ sentiment index rose to 25 from 22 a quarter ago. This was the highest score since the end of 2006.

The greenback dropped to a 5-week low of 0.7694 against the aussie and near 2-week low of 0.7034 against the kiwi, compared to Thursday’s closing values of 0.7665 and 0.6983, respectively. On the downside, 0.78 and 0.72 are likely seen as the next support levels for the greenback against the aussie and the kiwi, respectively.

The greenback that closed yesterday’s trading at 1.2794 against the loonie edged down to 1.2739. The greenback is seen finding support around the 1.26 mark.

On the flip side, the greenback rose to 1.3412 against the pound, after having fallen to 1.3447 at 9:15 pm ET. Further uptrend may take the greenback to a resistance around the 1.33 area.

Looking ahead, Canada existing home sales for November and manufacturing sales for October as well as U.S. industrial production for November are set for release in the New York session.

The material has been provided by InstaForex Company – www.instaforex.com

Source:: U.S. Dollar Falls On Tax Reform Concerns

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