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Currency Market Analysis

Dec 21, 2017 | Currency Market Analysis

Global Themes

USD slips as tax cuts passed

The USD slipped lower after President Donald Trump’s tax plan was finally approved overnight after a year of back-and-forth in Washington DC.

With so much focus on the new tax package over the last year, the eventual reaction saw both US sharemarkets and the greenback lower as markets followed the well-worn idiom of “buying the rumour and selling the fact”. This phenomenon sees markets often turn lower on the final announcement of good news.

The US dollar fell versus most major currencies.

Euro stronger

The euro saw more gains after yesterday’s European Central Bank commentary that suggested the central bank was nearing the end of stimulus.

The New Zealand dollar was higher after September-quarter NZ economic growth was reported in line with expectations.

US GDP

All eyes will remain on the US over the next two days with two major economic releases due.

US GDP is due at 9.30pm. A stronger number can push the USD higher.

Tomorrow night, the US personal consumption and expenditure number, a key reading of US inflation, will be released.


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