US Dollar consolidates above 93 ahead of tax bill vote
- U.S. Congress to vote on tax overhaul legislation on Tuesday.
- T-bond yields push higher on Tuesday.
- Wall Street struggles to extend the rally.
The US Dollar Index, which tracks the greenback against a basket of six trade-weighted peers, is having a difficult time finding direction on Tuesday as investors wait for the U.S. Congress to vote on the biggest overhaul of the U.S. tax system in more than three decades. At the moment, the index is at 93.27, up 0.04% on the day.
Despite the opposition of some Republicans, it seems like enough votes will be in place to pass the tax bill later today with Senators Susan Collins and Mike Lee voicing their support for the bill recently. On the other hand, Republican Representative Dan Donovan of New York, one of the states that won't be able to take advantage of the bill as much as other smaller states, told reporters that the bill would give tax relief to other parts of America on the backs of New Yorkers, as reported by Reuters.
Regardless of the relatively subdued trading action on Tuesday, however, the DXY was able to gain some traction in the early NA session amid the sharp increase seen in the U.S. Treasury-bond yields. The 10-year reference advanced to its highest level since October 7 at 2.454% today and was last seen at 2.448%, up 2.35% on the day.
In the meantime, after posting consecutive record closings on Friday and Monday, major equity indexes started the day under pressure as investors don't want to get caught on the wrong foot in case of a last-minute surprise.
Technical outlook
The index could encounter a tough resistance at 94.20 (Dec. 12 high) ahead of 95 (psychological level) and 95.60 (Jul. 14 high). On the downside, supports align at 93 (psychological level/Dec. 5 low), 92.40 (Nov. 27 low) and 91.90 (Sep. 21 low).
Today's data from the U.S.
- US: Building permits in Nov were at a seasonally adjusted annual rate of 1,298,000
- US: Current-account deficit decreased to $100.6 billion in Q3