- U.S. Dollar Gains After House Republicans Pass Tax Reform Bill
The House Republicans on Thursday finally get enough votes to pass the largest tax reform bill in history to ease tax burden and stimulate broad-based economic productivity.
A total of 227 representatives voted in favour of the bill while the remaining 205 voted against it.
However, the Senate still have to vote in December to decide the final fate of the bill but still, investors considered the house republicans overwhelming support a success and believe it is the first step towards achieving a broad-based fiscal stimulus.
President Donald Trump later on Thursday called the vote “a big step toward fulfilling our promise to deliver historic tax cuts for the American people by the end of the year.”
If finally passed, this would allow the Donald Trump-led administration to cut corporate tax to 20 percent, up from 35 percent, and reduce individual tax brackets to four from seven and moderate several tax breaks.
The US dollar responded positively after dropping for five consecutive days against the Euro single currency. Suggesting that the uncertainty surrounding the tax reform has been weighing on the U.S. dollar attractiveness.
The EURUSD called the top on Wednesday as projected in the previous analysis and dipped below the 1.1835 price level to validate bearish resumption. This, further affirmed the strong economic data coming from the U.S. as stated on Tuesday.
“Therefore, as long as prices remained below the $1.1835 levels, I will be treating current upsurge as a temporary rebound. Especially, with the Federal Reserve expected to raise interest rates in December and the push that President Trump will give tax reform on his resumption after his 11-day Asia tour should boost the US dollar attractiveness. Again, I don’t see the Euro reaching $1.2092 against the US dollar with all the strong economic data,” an excerpt from Tuesday analysis.