The US dollar is not having a happy Friday. The greenback is not collapsing, but just retreating across the board, leaning lower.
The biggest issue is tax reform. High hopes for getting a deal hit political reality. There are differences between the House and Senate bills. The latter one will reportedly include a delay of the corporate tax cut to 2019.
In addition, criticism is growing against the bill that is helping the rich and hardly doing anything to aid the poor. And while the Republicans control both chambers of Congress, the outcry and the polls matter a lot more after Tuesday’s off-year elections.
The opposition Democrats enjoyed sweeping victories in all races, from the gubernatorial races in Virginia and New Jersey through the smallest races. To add insult to injury for the Republicans, their candidate in the Senate race in Alabama is in trouble. Allegations of sexual harassment of a minor undermine Roy Moore in a race that was supposed to be very easy for the party in ruby-red Alabama.
There haven’t been too many data points this week, and so far they have been OK. Yet the last word belongs to the consumer confidence measure, and it missed expectations. The University of Michigan showed a drop from 100.7 to 97.8 points. This seems to exacerbate the troubles for the dollar.
- EUR/USD is climbing beyond the narrow range and reached 1.1672.
- GBP/USD woke up and climbed to 1.3224, rising above the middle of the range.
- USD/JPY extended its slide and reached 113.26.
- USD/CAD feels comfortable around 1.2687.
- AUD/USD is recovering to 0.7676.