Quantcast

Dollar Supported by Tax Reform Progress, Gains Limited by Concerns Over Government Shutdown


Shutterstock photo

The U.S. Dollar moved higher against a basket of major currencies on Wednesday, led by optimism over progress by the House and Senate on overhauling the U.S. tax system, lawmakers' efforts to avert a U.S. government shutdown this week-end and solid private-sector jobs data.

March U.S. Dollar Index futures settled at 93.237, up 0.233 or +0.25%.

The dollar is being underpinned on expectations that Congress is going to pass tax legislation sometime this year. Republicans are actually hoping to approve a final bill and deliver it to President Donald Trump's desk before Christmas.

Congressional Democratic leaders are also holding discussions with Trump and Republicans to avert a government shutdown on Saturday. The Democrats are pressing for demands on funding priorities and protecting young immigrants.

U.S. Economic Data

U.S. private-sector employment growth eased in November even as the manufacturing sector added the most jobs in at least 15 years.

According to the ADP National Employment Report, private employers added 190,000 jobs last month, down from an unrevised 235,000 in October. Traders were looking for a gain of 189,000 jobs.

Revised Nonfarm Productivity grew 3.0%, matching the previous read, but coming in under the 3.3% estimate. Revised Unit Labor Costs fell 0.2% versus a 0.2% forecast.

IBD/TIPP Economic Optimism was 51.9, down from the previous 53.6 and lower than the 54.6 estimate.

Gold

Gold price edged higher from near a two-month low on Wednesday, underpinned by a potential government shutdown, but limited by an advancing dollar on optimism over progress by Congress on tax reform. A modest recovery in U.S. equity markets also limited any advances.

Crude Oil

U.S. West Texas Intermediate and international-benchmark crude oil closed lower on Wednesday after the U.S. Energy Information Administration said crude oil stockpiles fell more than expected last week as refineries increased output, but gasoline and distillate inventories posted unexpectedly large builds.

Traders drove prices higher initially on the crude oil news, but the rally was stopped and prices turned lower in reaction to the gasoline and distillate reports.

U.S. Equity Markets

The major U.S. equity indexes closed mixed on Wednesday as investors took a breather as they awaited more details on progress towards tax reform. The tech-based NASDAQ Composite finished higher, driven by a nearly 2 percent rise in Facebook. The benchmark S&P 500 Index closed lower, helped by technology stocks, but pressured by energy stocks. The blue chip Dow also retreated, but gains were limited by a 1.5 percent rise in Microsoft stock .

This article was originally posted on FX Empire

More From FXEMPIRE:

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: Investing , Commodities , Oil , US Markets , Gold
Referenced Symbols: QQQ


More from FX Empire

Subscribe






FX Empire
Contributor:

FX Empire









Research Brokers before you trade

Want to trade FX?





Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com