The dollar began to rise in view of the tax reformMonday, 23 October 2017 00:00
After the low volatility of the dollar throughout the past week, on Friday the US markets showed the growth of the national currency at the close of the session. Despite the fact that North Korea did not cancel its intention to test nuclear weapons, no threats in this regard were not reported. In general, investors stopped being afraid of the failure of the currency market and again drew their attention to the first major global currency.
The second impetus can be considered 90% public confidence that the next head of the Fed will become Jerome Powell. Though Donald Trump has not announced his decision regarding this matter, the participants of the currency market are sure that a supporter of tight monetary policy will come to the board, and this will only contribute to the growth of the dollar.
The impact of the reform on the dollar’s growth
Another piece of good news was the successful preparation of the tax reform. Along with the fact that the other week the profitability of US national bonds increased, the setting in motion of the new tax rules will result more in the growth of the USD. It will have happened after approving the state budget by the House of Representatives, which is likely to be held this week.
In fact, the approval of the state budget is an important step to start implementing the changes in US taxation. This will probably become the greatest achievement of D. Trump in his position.
After the launch of the new mechanism, the country will get the great potential for economic growth in the next few years. Only a new threat from North Korea or results of the elections of a new head of the Fed can limit such opportunities.