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Forex - Dollar Remains Moderately Lower in Cautious Trade

Published 12/15/2017, 05:15 AM
© Reuters.  Dollar still on the downside as tax reform worries weigh
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Investing.com - The dollar remained moderately lower against other major currencies on Friday, amid fresh concerns over U.S. tax reform plans and as the Federal Reserve's most recent policy statement continued to weigh.

The greenback came under pressure after two U.S. Republican senators on Thursday sought changes to the proposed U.S. tax reform bill.

The bill needs a simple majority to pass in the Senate, in which Republicans hold just 52 of the 100 seats.

On Wednesday, the Fed raised interest rates by 0.25 basis points to 1.50% at the conclusion of its policy meeting, in line with expectations.

However, the central bank did not change its projections for 2018, which include three more interest rate hikes in both 2018 and 2019, disappointing expectations for four rate hikes next year.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.17% at 93.48 by 05:15 a.m. ET (09:15 GMT).

The euro edged higher, with EUR/USD up 0.17% at 1.1798, while GBP/USD held steady at 1.3423.

Sentiment on the single currency remained fragile after the European Central Bank kept monetary policy on hold on Thursday and revised up its forecast for growth and inflation, but added that underlying inflation remains subdued.

The Bank of England also left interest rates on hold on Thursday and said there has been “progress” in Brexit negotiations between the UK and Brussels.

USD/JPY slipped 0.19% to 112.17, while USD/CHF edged down 0.11% to 0.9880.

Earlier Thursday, data showed that Japanese business confidence improved for a fifth straight quarter in the three months to December.

Elsewhere, the Australian and New Zealand dollars remained stronger, with AUD/USD up 0.13% at 0.7677 and with NZD/USD gaining 0.47% to trade at 0.7017.

Meanwhile, USD/CAD slid 0.29% to 1.2753.

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