Dollar Index approaches daily highs after US House vote on tax cuts
- US Dollar rises modestly after House of Representatives passes tax cut bill.
- DXY trims part of weekly losses.
The greenback rose modestly after the House of Representatives passed the tax bill by 227 to 205. The US Dollar Index rose from 93.75 to 93.84, getting closer to daily highs while the Dow Jones extended gains to almost 1% (the best performance in months).
The vote represents a key step in the plan of President Trump’s tax cuts for businesses and individuals. Still, the final result is not clear. The Senate is debating a different plan, with not enough votes guaranteed yet; it includes delaying corporate tax cuts by one year and a proposal to repeal parts of Obamacare.
There could still be a long way to the final result in the tax cut bill. The differences between the House and Senate need to be solved and then both chambers will have to pass the bill.
The DXY is up today after losing ground during the previous two days but is still significantly lower from the level it had at the beginning of the week. Yesterday posted the lowest close since October 25 and technical indicators still show some downside risks.
At the moment of trading, DXY stands at 93.83 with the immediate resistance seen at daily highs at 93.88, above the next levels to watch might lie at 94.10 (Nov 11 low) and 94.25 (Nov 2 & 3 low). On the downside, support levels lie at 93.60/65, 93.25 (weekly low) and 93.00.