Dollar hits two week high on U.S. tax reform hope

dollar

The U.S. currency slipped against the safe-haven Japanese yen on Wednesday after U.S. President Donald Trump said he would recognize Jerusalem as the capital of Israel, a move that imperiled Middle East peace efforts and provoked widespread condemnation.

But amid a broader climb in global stocks on Thursday, the greenback rose 0.3 percent against the yen to trade at 112.60 yen =JPY, and hit a two-week high against a basket of peers.

The MSCI World Index, which tracks shares in 47 countries, was up 0.1 percent.

Underpinning some of the dollar’s gains analysts said was some cautious optimism on progress over U.S. tax reforms.

Rabobank currency strategist Jane Foley, in London said, “The dollar is fighting back a little bit but there’s still some caution, as it could still be a few weeks until we know the outcome of the tax reform bill.”

She added, “The yen will be sensitive if geopolitical tensions rise again, and I think there’s an inevitability to that, so I don’t think there’s going to be too much updside for dollar/yen in this environment.”

Bitcoin soared to a record high of more than $14,500, up almost 7 percent on the day and continuing a staggering surge from less than $1,000 at the beginning of the year.

STOCKS RECOVER

European stock markets appeared to take their cues from a general recovery in tech stocks overnight in Asia and Wall Street.

The pan-European STOXX 600 was up 0.2 percent with tech stocks .SX8P initially up 0.5 percent. Financials, industrials and healthcare shares also added points to the index.

Analyst at CMC Markets in London, David Madden said, “We have seen some aggressive moves in Asia, whereas Europe seems to be a bit more subdued.”

He said, “It’s almost like European markets look for an excuse to selloff but it takes them a lot to be convinced to actually push higher.”

Shares in the energy sector, which weighed on shares earlier in Wall Street and Asia, rose in Europe, as oil prices recovered from a big fall on Wednesday.

U.S. West Texas Intermediate crude futures CLc1 traded at $56.13 per barrel in European trade, up 0.3 percent on the day.

Brent futures LCOc1 gained 0.4 percent to $61.45 per barrel.

In Japan, the Nikkei .N225 jumped 1.5 percent, recouping much of its 2.0 percent loss the previous day, which was its biggest fall since late March.

The price of copper, seen as a barometer of global economic health because of its extensive industrial use, also fell sharply earlier this week, raising worries about the world growth outlook.

Copper CMCU3 traded at $6,576 a tonne, up 0.5 percent on the day and above a two-month low of $6,507.5 touched on Tuesday.

Source: Reuters

Trump accepts Jerusalem as Israel’s capital

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