US Dollar Ends Week Vulnerable Even as US Congress Passes Tax Reform Bill

The US dollar ended the week soft versus the majority of its most-traded rivals even though the US Congress passed the long-awaited tax reform bill.

The Congress passed the bill on Wednesday after a procedural hiccup in the House on Tuesday. Yet the greenback did not welcome the news, perhaps because economists criticized the final version of the bill for being extremely beneficial to the rich, while having few benefits to the middle-class, meaning that the positive impact of the reform on the economy may be limited. The currency also weakened as the final revision of US gross domestic product for the third quarter of this year missed expectations slightly. The housing market, on the other hand, looked very healthy, with all reports for the sector released over the week beat forecasts, but that did not help the dollar.

The Canadian dollar ended trading very strong thanks to the better-than-expected inflation data. The GDP report came out worse than was forecast, showing no growth of the economy in October from September (seasonally adjusted) versus the predicted growth of 0.2%, but that hardly affected the loonie.

The euro got a hit by the end of the week from the victory of Catalan separatists, who got majority in Catalonia’s parliament after an election.

EUR/USD rallied 1.1% from 1.1744 to 1.1860. USD/JPY ticked up from 112.72 to 113.24. USD/CAD dropped 1.1% from 1.2866 to 1.2720.

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