- Dollar edges upwards as Senate passes tax bill
- Wall Street set to hit fresh record-high
- Pound steady on hopes of Brexit breakthrough
- Oil losses bullish momentum
The dollar rallied after the US Senate passed the highly-anticipated tax bill over the weekend. The greenback is 0.3% stronger against a basket of its peers, as investors leave out a sigh of relief that some of the fiscal stimulus, that has swollen equity prices this year, will be delivered.
Investors are staying closely pinned to the US political arena, where Donald Trump’s campaign’s dealings with Russia are being investigated.
News of M Michael Flynn, a former national security adviser Donald Trump, pleaded guilty to lying to the FBI about his involvement with Russia sent the dollar lower on Friday.
The waves of political news coming from Washington has sent a volt of volatility into markets.
Meanwhile, hopes of a breakthrough in Brexit negotiations has supported the pound. Sterling has climbed 0.3% against the dollar, while reaching its strongest point against the euro in a month.
Both sides have drawn up a draft agreement which could break the deadlock on Brexit negotiations. The topic of the Irish border has brought a lot of contention to the talks and businesses on both sides are eager to reach an agreement.
Stock markets are set to reach fresh record highs on the prospect of the major tax overhaul. Wall Street’s S&P 500 may rise 0.6% at the US opening bell, according to equity futures. While the Dow Jones could gain 0.9%.
It is expected that the corporate tax will be brought down to 20% from 30%, therefore companies that rely on domestic earnings will benefit the most.
Oil prices are dwindling as the momentum from the extension of OPEC-led production cuts fade. Brent oil, the international benchmark, has given up 1.1%, to trade below $63 per barrel. Crude oil, the US benchmark, is 1.2% lower, trading at $57.60 per barrel.
The stronger dollar has left gold 0.4% weaker, trading at $1274.80.