US dollar pressure continues ahead of expected US tax reform details

The US dollar remains under pressure Thursday as the markets await some clarification on the likely timeline of the US tax reform implementation.

US dollar pressure continues ahead of expected US tax reform details

The US dollar remains under pressure, as investors prefer to sell the currency as they await some clarification on the timing of the eagerly anticipated US tax reforms.

The dollar showed a minor improvement against a number of currencies, however, as the US business morning gets underway.

By around 1400 BST, the British pound was worth $1.311, up from $1.3090 around midday. One euro, meanwhile was buying $1.1607, although it had reached $1.164 earlier.

Precarious politics

While uncertainty surrounding the US tax reform plan is taking centre stage for investors Thursday, the UK political situation isn’t faring much better.

Indeed, after the resignation of US secretary of State for International Development, Priti Patel, late Wednesday, there’s increased talk over the stability of UK Prime Minister May’s current government.

However, as that has been almost a constant feature of her period in power, it’s likely not considered as important or influential as a potentially significant delay to one of Trump’s ‘success’ stories.

The resumption of Brexit talks also paves the way for some potentially market moving news – of both the positive and negative variety – which could be keeping some investors interested in the British pound.

Confident Central Bank

The euro, meanwhile, is benefitting from the continuation of its economic recovery. As many of the recent third-quarter earnings results have highlighted, the backdrop across much of Europe is much healthier than it has been.

In addition, the European Commission Thursday upgraded its forecast for Euro Area economic growth. The Commission now expects economic growth of 2.2% in 2017, an increase from its May forecast of 1.7%, on “resilient private consumption”.

That’s in line with the European Central Bank’s (ECB) more positive view, as it will begin reducing its asset-purchase program in 2018.

Confirming that view was ECB board member, Benoit Coeure, who Thursday described the euro zone’s economic recovery as “robust and balanced.”

As of 14:09 GMT, Thursday, 09 November, GBP/USD share price is 1.3117.

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