Economy

Yellen lifts dollar as global markets await Trump tax plan

Yellen lifts dollar as global markets await Trump tax plan”

The plan proposes a 20 per cent corporate income tax rate, a new 25 per cent tax rate for pass-through businesses including partnerships. and a reduced 35 per cent top income tax rate for individual Americans, according to a framework seen by Reuters.

"Nevertheless, the U.S. dollar gained across the board and the index has reached a new monthly high but the truth is that most of these gains have to be attributed to Fed's bullish views and their intention to raise rates one more time in December".

Cyclical sectors that had surged on the prospect of "Trumpflation" resulting from the president's pro-growth campaign pledges were the day's top gainers, with miners up 1 percent.

"With rates going up, that is why banks move".

This is a lie, just like the lies that followed when the president began to discuss his tax plan.

When the price of a bond falls, the yield rises. The VIX is also called the "fear index".

Lawmakers should expect a "very, very powerful document" that would cut taxes "tremendously" for the middle class, Trump said on Tuesday.

Others noted though it could be an uphill battle to get the changes approved. The euro EUR= hit a six-week low of $1.1717 as the dollar broadly gained, and last traded at $1.1729, having shed 1.9 percent so far this week. German inflation figures were already dribbling in while economists were also waiting for euro zone wide economic confidence readings due at 0900 GMT. This is still up 2 bps on the day.

The dollar rose half a percent to a one-month high against a basket of currencies and yields on interest rate-sensitive two-year U.S. Treasury yields touched their highest since 2008 after Fed Chair Janet Yellen said on Tuesday it would be "imprudent" to keep rates on hold until U.S. inflation hit 2 percent.

Canada's loonie was last at C$1.2483 to the USA dollar, having early slid to its lowest in a month.

Small-cap USA shares, seen as benefiting the most from the proposed tax cuts, soared, with the Russel 2000 small-cap index .RUT notching a record high, rising 1.9 percent for its biggest one-day gain in nearly six months.

Comments earlier in the week from Fed Chair Janet Yellen that the USA central bank needs to continue with gradual rate hikes have cemented expectations for policy tightening by year-end.

U.S. Treasury yields, pushed up on Wednesday by stronger-than-expected durable goods data, extended their rises into European trade on Thursday.

Shares of big banks, including Bank of America, JPMorgan and Goldman Sachs, were up about 1.5%, after Federal Reserve chair Janet Yellen said it would be "imprudent" to keep rates on hold until USA inflation hit the 2% target.

Brent crude futures slipped from 26-month highs, while US West Texas Intermediate crude rose after stockpiles unexpectedly fell as refiners in the Golf Coast were coming back online following hurricane-related outages.

Canada's loonie fell to C$1.2469 to the US dollar, its lowest in a month.



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