The dollar remained supported at two-and-a-half week highs against other major currencies on Friday, amid mouting optimism over a major U.S. tax reform plan and as investors eyed the release of key U.S. employment data due later in the day.
The greenback was boosted after the U.S. Congress on Thursday passed legislation to temporarily fund the government through December 22, beofre a Friday midnight deadline and fuelling hopes the highly-anticipated U.S. tax reform will also be passed before the end of the year.
U.S. Senate Republicans agreed to talks with the House of Representatives on a major tax reform bill on Wednesday, signaling that lawmakers could agree on a final bill ahead of a self-imposed December 22 deadline.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.25% at 93.98 by 05:05 a.m. ET (09:05 GMT), its highest since November 21.
The euro was lower, with EUR/USD down 0.30% at 1.1738, the lowest since November 23, while GBP/USD held steady at 1.3478.
Sterling found support after European Commission President Jean-Claude Juncker said on Friday that “sufficient progress” has been made in the first phase of Brexit talks and that discussions can now move to trade.
Also Friday, the UK Office for National Statistics reported that manufacturing production rose unexpectedly by 0.1% in October, while industrial production was flat.
Elsewhere, the yen and Swiss franc were lower, with USD/JPY up 0.41% at 113.54 and with USD/CHF adding 0.24% to 0.9968.
Earlier Friday, official data showed that Japan’s gross domestic product expanded by 0.6%in the third quarter, beating expectations for a growth rate of 0.4%. Year-over-year, Japan’s economy grew 2.5% in the last quarter, blowing past projections for 1.5%.
The Australian and New Zealand dollars were little changed, with AUD/USD at 0.7509 and with NZD/USD at 0.6836.
The Aussie was boosted by data on Friday showing that China’s imports climbed more than expected by an annual rate of 17.7% in November, while exports increased by 12.3%. China is Australia’s biggest export partner.
Another report showed that Australia’s home loans fell only 0.6% in October, compared to expectations for a 1.8% decline.
Meanwhile, USD/CAD was almost unchanged at 1.2861.
