Tax reform hopes support bullish dollar sentiment

The Senate unveiled its tax plan which proposes lowering corporate tax cuts to 20% in 2019 instead of 2018 as proposed by House Republicans. At the same time the House Ways and Means Committee passed the Republicans’ bill which proposes cutting corporate taxes to 20% from 35% and repeals the estate tax. Economic data were mixed: the producer price index for October remained steady at 0.4% over month when a decline to 0.1% increase was expected. On the negative side consumer sentiment deteriorated in November as reported by the University of Michigan and US federal budget deficit for October rose $17 billion from the same period last year to $63.2 billion dollars. As is evident from the Sentiment table, sentiment deteriorated for all major currencies except the British Pound and euro . And the Canadian and Australian dollars together with euro remain the three major currencies held net long against the US dollar.