Dollar gains broadly after Trump says to announce major tax plan

Thu Feb 9, 2017 3:08pm EST
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By Gertrude Chavez-Dreyfuss and Dion Rabouin

NEW YORK (Reuters) - The dollar rose across the board on Thursday, posting its best one-day gain against the yen in three weeks, after comments from U.S. President Donald Trump that he would make a major announcement on a "phenomenal" tax plan in the next few weeks.

The greenback advanced against the euro in three of the four last sessions, as well as climbing to more than one-week highs versus the Swiss franc. Gains were boosted by Thursday's upbeat U.S. economic data.

Investors have been waiting impatiently for details on Trump's campaign trail pledges to inject the U.S. economy with large-scale fiscal stimulus through additional spending and tax cuts.

In a meeting with airline executives, Trump said on Thursday his administration will announce "something phenomenal in terms of tax" but offered no details.

"It's been a broad-based dollar rally driven by the headlines that Trump plans to announce something phenomenal on taxes in the next few weeks, in his words," said Kathy Lien, managing director of BK Asset Management in New York.

"That was really the crux of the dollar rally shortly after his election and I think investors are getting really excited about that again."

The dollar .DXY gained more than 5 percent against a basket of major currencies in the month and a half after Trump's election but has been on a downtrend this year as Trump has focused more on trade and immigration than fiscal stimulus.

His cabinet picks also have drawn stiff opposition and his travel ban for refugees and citizens of seven Muslim-majority countries was met with large protests around the world.   Continued...

Reserve Bank of New Zealand dollar notes are pictured in Singapore June 22, 2006. REUTERS/Dennis Owen/File Photo