UPDATE: Euro bulls try for comeback on U.S. tax-cut worries
By Anneken Tappe
Senate plan may delay corporate tax cuts until 2019: report
Worries over the progress of U.S. tax-cut legislation and a light economic calendar have left the dollar with a dearth of positive catalysts and appear to be reinvigorating euro bulls.
"U.S. tax reform has been at the center of the market's attention and it seems the dollar longs are easily spooked by a juicy headline," wrote Lennon Sweeting, head of corporate trading and chief market strategist at XE.com.
Question marks appeared over Republican tax-cut legislation, as the Senate's tax plan released late Thursday (http://www.marketwatch.com/story/senate-tax-bill-delays-corporate-cut-doesnt-repeal-estate-tax-2017-11-09) proposed to delay a cut in the corporate tax rate to 20% until 2019. That helped to weigh on the dollar along with existing concerns that differences between the Senate and House versions of the tax legislation could bog down the process.
"It is becoming increasingly clear that the dollar has become sensitive to expectations of [President Donald] Trump moving forward with the tax plan, with any negative news on the developments exposing the currency to downside risks," wrote Lukman Otunuga, FXTM's chief market strategist.
Making matters worse for the dollar, European data on Thursday showed that the eurozone is set to grow at its fastest rate (http://www.marketwatch.com/story/eurozone-to-grow-at-fastest-rate-in-a-decade-in-2017-says-eu-2017-11-09) in a decade in 2017. Drivers include job creation, more investments and less debt. This was in line with the generally strong economic data from the region this year, compared with that of the U.S.
Just a couple of months ago, euro bulls had turned tail, with currency traders focusing their bets instead on prospects for U.S. tax cuts.