US dollar makes gains on US tax reform bill hopes

US dollar makes gains on US tax reform bill hopes

The US dollar is holding on to earlier gains mid-afternoon Thursday, as investor sentiment is buoyed by the US government’s efforts to deliver the US tax reform bill to US President Trump, this side of Christmas.

However, other developments are likely limiting the US dollar upside, including rhetoric from North Korea that war between the two countries “is an established fact.”

By 1420 BST, the US dollar had gained further ground against the British pound. Cable was trading at $1.3383, down from the $1.3418 it hit earlier Thursday and at similar levels as were seen Wednesday.

US tax reform bill process continues

Progress on the US tax reform bill is ongoing, albeit at a slow pace. Wednesday’s development was for the Senate and the House to agree to talks over the bill, in a bid to reconcile disagreements and have a final version ready by December 22.

Formal negotiations will see representatives from each chamber lay out the sticking points to each other. Once they have been made clear, discussions can begin, with the hope of finding suitable compromises.

It’s likely a number of key issues will be brought up by the Senate and the House. However, there is optimism an agreement can be reached over a short period of time.

"Now that the Senate has voted to join our House colleagues in a conference committee, I’m confident that this distinguished group of senators will work to get the job done,” said Senate Majority leader, Mitch McConnell as he named eight Senate representatives to join the committee.

North Korea’s war talk

Meanwhile, the latest comments out of Pyongyang provoked further tension.

A statement from North Korea’s foreign ministry said it’s no longer a case of if war breaks out between the US and North Korea, but when.

“The remaining question now is: when will the war break out?” a foreign ministry spokesman said in a statement reported by North Korean news agency, KCNA, late Wednesday. “We do not wish for a war but shall not hide from it.”

By Ilona Billington
Ilona is a freelance writer and editor with over 15 years experience reporting and writing about UK and European economics, real estate, financial markets and central banks.

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