Dollar down as Trump health care blow fuels tax reform fears

The greenback had soared along with global markets for months after Trump's November election victory on hopes his big-spending, tax-cutting policies would fire up the world's top economy and fan inflation.

Dollar down as Trump health care blow fuels tax reform fears

World Bulletin / News Desk

The dollar sank Tuesday as two Republican senators rejected their party's bill to repeal Obamacare, effectively killing it and throwing Donald Trump's economic agenda into doubt.

But an ongoing crisis surrounding the White House has hobbled the tycoon's presidency, with opposition to his controversial health care reforms -- crucial to freeing up cash -- raising questions about his ability to push through other big-ticket measures.

While Republicans have 52 of the Senate's 100 seats, the opposition to the bill from two members last week was followed Monday by two more. Their decision means the bill has no chance of even getting a vote unless Senate Majority Leader Mitch McConnell makes significant changes to woo sceptics.

“Any hopes of dollar support from a successful vote on the Senate’s health-care bill look to be vanishing after today’s news,” Rodrigo Catril, a currency strategist at National Australia Bank in Sydney, told Bloomberg News.

“Near term, the dollar path of least resistance is down."

The dollar came under pressure as traders eye the Federal Reserve's timetable for raising interest rates, while Trump struggles and inflation remains subdued.

Recent remarks from Fed boss Janet Yellen indicating the bank will concentrate on prices have tempered rate expectations in recent weeks.

The euro broke above the $1.15 mark for the first time since last June, with eyes on the European Central Bank's policy meeting later on Thursday.

While ECB chief Mario Draghi is not yet expected to announce any tightening measures, there is speculation it will begin winding down its stimulus programme as the eurozone economy improves.

Last Mod: 18 Temmuz 2017, 11:01
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