- US House approves tax overhaul; Wall Street lower
- Housing starts and building permits better than expected
- Commodity currencies and yen drift lower
By Michael O'Neill
NY focus: The seemingly never-ending US tax reform debate is inching closer to the finishing line. Today, the US House passed tax reforms by a 227-203 vote. The bill is back to the Senate for further debate tonight. and it could be signed into law by tomorrow.
Wall Street shrugged off the news and finished the day with the three major indices in the red, in light trading.
was bid at the open and chopped around in a tight 1.1805-1.1830 range all morning. Prices popped to 1.1847 after the tax news and closed near the peak. The greenback did not get any benefit from solid November Housing Starts (Actual 3.3% vs forecast -3.7%, m/m) or Building Permits (Actual -1.4% vs -4.9%, m/m).
Sterling dropped from 1.3385 to 1.3332 by mid-morning for no particular reason and then retraced the move by the end of the day. The price action is typical for this time of year.
rallied from the open, rising from 112.55 to 113.06 before late afternoon profit-taking took prices back to 112.89. Rising US Treasury yields underpinned the currency pair.
The rising Treasury yields undermined the commodity bloc currencies. NZDUSD
led the decline, with the drop from 0.7016 to 0.6985 fuelled by weaker-than-expected GlobalDairyTrade auction results.
The American Petroleum Institute reported a 5.22 million barrel decline in US crude inventories at the end of the day. WTI was lifted to $57.75 from $57.58. Gold consolidated recent gains while trading in a $1,259.27-$1,265.14 range.
The seemingly never-ending US tax reform debate is inching closer
to the finishing line. Photo: Shutterstock
Wednesday focus: The US Senate is expected to pass the sweeping US tax reform bill tonight (this morning in Asia). Treasury yields popped on the news, which has underpinned USDJPY. The intraday USDJPY technicals are bullish while prices are above 112.60, looking for a break of 113.10 to extend gains to 113.70.
USDJPY 1 hour
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– Edited by Gayle Bryant
Michael O'Neill is an FX consultant, currency strategist and author of the Trade of the Day at Loonieviews.net. Follow Mike or post your comment below to engage with Saxo Bank's social trading platform.