On Tuesday, the dollar steadied after reporting its largest daily rise in a week in the previous session as concerns develop prior to President Trump’s U.S. tax bill coming to life, with sterling leading early losers.
“With regards to the dollar, everything is already there in the price and we need to see further movement on the tax bill or strong data to push it higher,” said Manuel Oliveri, an FX strategist in London.
The Senate is now required to put together its version of the bill with legislation passed by the House of Representatives. Against a basket of six major currencies, the dollar crept up 0.1 percent higher at 93.278 following the gains of around 0.3 percent from the day prior, its largest daily rise since November 28th.
In early trading, sterling fell over a half of a percent in as letdown over a Brexit deal encouraged investors to cash in on their long bets. The British currency dropped 0.8 percent to $1.3375, widening its decline from Asia. On Monday, Prime Minister Theresa May was unsuccessful to seal a deal leading to opening discussions on post-Brexit free trade with the European Union. May’s provisional deal with Dublin to maintain EU rules in Northern Ireland infuriated her allies in Belfast.
Commerzbank strategists related sterling’s volatility on Monday to how trying the Brexit negotiations maintain to be. “As soon as the second round of the negotiations starts, which will be dealing with the trade agreement, things are going to heat up further as every single one of the 27 EU countries had the right to veto the agreement and can therefore block any progress,” they said.
The Australian dollar led early gainers after the currency was 0.6 percent higher at $0.7639, following October’s data of strong retail sales after previous months of subdued demand.
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