December 18, 2017 / 3:06 PM / 6 months ago

FOREX-Dollar under pressure on U.S. tax reform concerns

    * House-Senate Republicans put finishing touches on tax bill
    * Dollar awaits passage of tax bill for more incentive
    * Bitcoin hits new record high over weekend

 (Adds comment, updates prices, changes byline, dateline;
previous LONDON)
    By Gertrude Chavez-Dreyfuss
    NEW YORK, Dec 18 (Reuters) - The dollar fell against a
basket of major currencies on Monday, as concerns grew on
whether a proposed U.S. tax reform program would have a major
impact on economic growth, after the bill moved another step
closer to passage over the weekend.
    The U.S. currency had edged higher after Republicans on the
House-Senate negotiating committee on Friday put the finishing
touches to a sweeping tax overhaul that involves large cuts in
levies on corporations.
    But it slid on Monday on some uncertainty that the bill
would indeed be pushed through, and with some doubts creeping in
over the pro-growth effect the tax reforms would have.
    "Traders are taking a more cautious approach...with
uncertainty about the real-world impact of the tax package to
keep risk appetites suppressed," said Karl Schamotta, director
of global product and market strategy for Cambridge Global
Payments in Toronto.
    But he believes the dollar has further scope to go higher.
    Economic forecasters expect lower corporate taxes to raise
U.S. growth by roughly 0.5 percent over the next year,
potentially lifting the pace of interest rate increases from the
two currently being priced in by the market to closer to the
three hikes consistently estimated projected by Federal Reserve
policymakers, Schamotta said.
    Against a basket of major currencies, the dollar fell 0.4
percent to 93.568. The euro benefited from the dollar's
weakness, gaining 0.5 percent to $1.1807.
    Year-end demand for dollars had helped push the greenback up
against the euro in recent sessions, said Alvin Tan, a
strategist at Societe Generale in London, but that had slowed on
Monday, adding to pressure on the dollar.
    Top Republicans are confident Congress will now pass the tax
bill this week, with a Senate vote as early as Tuesday and
President Donald Trump aiming to sign the bill by week's end.

    The dollar was 0.1 percent lower against the yen at 112.54
yen following Friday's rise of 0.2 percent.
    The greenback also failed to get support from the rise in
U.S. Treasury yields on Monday. That said, the long-term
Treasury yield has been confined to a narrow 2.34-2.42 percent
range over the past week.
    Bitcoin, meanwhile, was down 1.5 percent at $18,676
 on the Bitstamp exchange. It rose to a record high of
$19,666 on Sunday, ahead of the launch of bitcoin futures from
CME Group Inc.
    
========================================================
    Currency bid prices at 9:49 AM (1449 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.1806        $1.1752     +0.46%         +0.00%      +1.1809     +1.1739
 Dollar/Yen       JPY=        112.4800       112.5700    -0.08%         +0.00%      +112.8300   +112.4500
 Euro/Yen         EURJPY=     132.82         132.32      +0.38%         +0.00%      +132.8800   +132.2200
 Dollar/Swiss     CHF=        0.9865         0.9903      -0.38%         +0.00%      +0.9917     +0.9867
 Sterling/Dollar  GBP=        1.3407         1.3319      +0.66%         +0.00%      +1.3418     +1.3310
 Dollar/Canadian  CAD=        1.2858         1.2860      -0.02%         +0.00%      +1.2880     +1.2844
 Australian/Doll  AUD=        0.7669         0.7644      +0.33%         +0.00%      +0.7672     +0.7641
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.1649         1.1640      +0.08%         +0.00%      +1.1668     +1.1636
 Euro/Sterling    EURGBP=     0.8804         0.8818      -0.16%         +0.00%      +0.8840     +0.8793
 NZ               NZD=        0.7008         0.6989      +0.27%         +0.00%      +0.7028     +0.6993
 Dollar/Dollar                                                                                  
 Dollar/Norway    NOK=        8.3279         8.3785      -0.60%         +0.00%      +8.3952     +8.3297
 Euro/Norway      EURNOK=     9.8347         9.8494      -0.15%         +0.00%      +9.8805     +9.8340
 Dollar/Sweden    SEK=        8.4246         8.5046      -0.49%         +0.00%      +8.5172     +8.4245
 Euro/Sweden      EURSEK=     9.9477         9.9964      -0.49%         +0.00%      +10.0020    +9.9440
 
    
 (Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by
Jemima Kelly and Tommy Wilkes in London)
  
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