Forex - Dollar Turns Broadly Higher on U.S. Tax Plan Hopes

13/09/2017 14:52:04 Forex

The dollar turned broadly higher against other majors on Wednesday, as news that a U.S. tax plan will be announced shortly overshadowed disappointing U.S. data released earlier in the day.

The greenback regained some strength after U.S. House Speaker Paul Ryan said a tax plan outline backed by tax writing committees was set to be released on September 25.

Ryan was set to reveal details of the plan on Wednesday morning following a closed conference meeting.

The meeting came a day after President Donald Trump added pressure on Democrats to support a rewrite of the national tax code following a surprise deal last week to raise the debt ceiling and accelerate hurricane relief.

The U.S. dollar had weakened earlier after data showed that U.S. producer price inflation and its core reading increased less than expected in August.

The safe-haven yen and Swiss francturned lower, with USD/JPY up 0.37% at 110.56and with USD/CHFgaining 0.42% to 0.9638.

Meamwhile, market sentiment was still midly supported as Hurricane Irma appeared to have caused less damage than feared and in the absence of any new provocations from North Korea.

Irma, which had hammered the Caribbean late last week andwas one of the most powerful Atlantic hurricanes, weakened to a tropical depression, easing concerns over the severity of its financial impact.

Separately, market participants seemed to shrug off North Korea’s rejection of sanctions imposed by the U.N. Security Council.

The Security Council voted unanimously on Monday to step up sanctions on the peninsula, in response to its sixth nuclear test.

U.S. President Donald Trump said Tuesday that the U.N. sanctions were a "very small step" and "nothing compared to ultimately what will have to happen" to combat the regime's nuclear program.

Elsewhere, EUR/USD declined 0.46% to 1.1910, while GBP/USD lost 0.33% to trade at 1.3238 after data showed that the UK unemployment rate unexpectedly fell in July but wages registered a weaker-than-expected growth.

The Australian erased earlier gains, with AUD/USD down 0.39% at 0.7988, while NZD/USD retreated 0.56% to 0.7245.

Meanwhile, USD/CAD edged up 0.16% to trade at 1.2206.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.46% at 92.31 by 10:50 a.m. ET (14:50 GMT).

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