• The dollar remained mired in its recent ranges in subdued trade on Tuesday, as optimism that the U.S. tax reform bill would pass dueled with doubts about its ultimate effect on the economy.
The dollar index, which tracks the U.S. currency against a basket of six major rivals, was steady on the day at 93.673 .DXY.
The Republican-controlled U.S. Congress appeared all but certain to pass sweeping tax legislation this week after two Senate Republican holdouts agreed on Monday to support a tax overhaul backed by President Donald Trump.
The dollar edged up 0.1 percent to 112.63 yen JPY=, drifting in a range between its high of 113.750 hit a week ago and Friday's low of 112.035.
The euro edged up slightly to $1.1789 EUR=.
Bitcoin was up 0.2 percent at $18,952.51 BTC=BTSP on the Luxembourg-based Bitstamp exchange, below its record high of $19,666 hit on Sunday.
• The United States was further isolated on Monday over President Donald Trump’s decision to recognize Jerusalem as Israel’s capital when it blocked a United Nations Security Council call for the declaration to be withdrawn.
The remaining 14 council members voted in favor of the Egyptian-drafted resolution, which did not specifically mention the United States or Trump but which expressed “deep regret at recent decisions concerning the status of Jerusalem.”
• The Republican-controlled U.S. Congress appeared all but certain to pass sweeping tax legislation this week after two Senate Republican holdouts agreed on Monday to support a tax overhaul backed by President Donald Trump.
As the Republicans’ self-imposed Friday voting deadline loomed, Senators Susan Collins and Mike Lee each said they had decided to back the legislation hammered out last week among Republicans from the Senate and House of Representatives.
The House of Representatives, which is also expected to adopt the bill, was due to vote first at around 1:30 p.m. (1830 GMT) on Tuesday, Republican aides said. The Senate vote is expected to follow either later on Tuesday or on Wednesday.
• Global central banks will start holding digital currencies in the next year, the chief executive of a cyrptocurrency wallet platform told CNBC Monday.
"I think this year will be the first year we start to see central banks start to hold digital currencies as part of their balance sheet," Peter Smith, CEO of Blockchain, told CNBC.
Smith said that central banks would likely buy bitcoin and Ethereum as part of their reserves. Central banks hold gold and foreign currency reserves to allow them to act if there are any market shocks.
The rise of bitcoin as an asset could mean some monetary authorities will have to begin holding it.
• Expect more political volatility in 2018 to follow an already volatile year, director for Europe and Africa at Control Risks, Nick Allen, told CNBC Monday.
"What we've seen is a real shift to national politicians driving the agenda and businesses are having to adjust to that," Allen said. "So more political volatility — we've had a lot of that in 2017 so more in 2018 is what we're looking at."
Investors are looking to the coming year and many are questioning just how extreme that volatility will be, given that markets have performed historically well even amid increased geopolitical risk.
Markets, meanwhile, have not been fazed by the political volatility of the past year, delivering record rallies amid a backdrop of increasing populism, an unpredictable U.S. president, escalating tensions in the Middle East, and wayward North Korean missile tests.
• *The schedule of Tax Reform*
The House Rules Committee will meet Monday evening to set up floor consideration Tuesday of the bill.
The House is expected to vote Tuesday.
The Senate is expected to take up the bill soon after, with a final vote Tuesday or Wednesday.
• Japan formally decided on Tuesday it would expand its ballistic missile defence system with U.S.-made ground-based Aegis radar stations and interceptors in response to a growing threat from North Korean rockets.
• Japan’s government revised up its growth projections for the current and next fiscal years, forecasting the economy to expand 1.9 percent and1.8 percent respectively on the back of steady improvement in domestic demand, the Cabinet Office said on Tuesday.
Consumer inflation is estimated at 0.7 percent for this fiscal year and 1.1 percent next, underscoring the challenge for the central bank to accelerate inflation to its 2 percent target as prices continued to lag an economy growing at a steady pace.
The gross domestic product projections compared with earlier estimates by the Cabinet Office of 1.5 percent and 1.4 percent growth respectively in the current and next fiscal years.
• The World Bank on Tuesday raised its forecast for China’s economic growth in 2017 to 6.8 percent from 6.7 percent it projected in October, as personal consumption and foreign trade supported growth.
But the Washington-based lender kept its forecast for China’s 2018 and 2019 GDP growth unchanged at 6.4 percent and 6.3 percent, respectively, due to less accommodative monetary policy and the government’s effort to rein in credit and control leverage.
The key downside risks to the forecast are the still rising leverage of the non-financial sector and uncertainty around housing prices.
• British employers plan to hire more workers and raise pay more quickly in 2018, but they also fear that Brexit will make the country a less attractive place to do business, a survey showed on Tuesday.
Fifty-one percent of employers expect to expand their workforce next year, the survey by the Confederation of British Industry (CBI) and recruitment firm Pertemps showed, up from 41 percent in last year’s survey.
• U.S. Vice President Mike Pence is postponing his trip to Egypt and Israel this week in order to stay in Washington for a congressional vote on President Donald Trump’s tax overhaul plan, White House officials said on Monday.
Pence had been scheduled to depart on Tuesday night for Cairo. Instead, the trip will be rescheduled for the week of Jan. 14, officials told reporters.
Pence has been a key figure in the Republican effort to overhaul U.S. tax law. He could provide a tie-breaking vote in the Senate if needed, though on Monday it looked like bill has enough votes among Senate Republicans to pass.
• Oil markets edged up on Tuesday as the Forties pipeline outage in the North Sea and voluntary production restraint led by OPEC supported prices, although soaring output in the United States put a cap on gains.
U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $57.33 a barrel at 0526 GMT, up 17 cents, or 0.3 percent, from their last settlement.
International Brent crude futures LCOc1 were at $63.55 a barrel, up 14 cents, or 0.2 percent.
Reference: CNN,CNBC,Reuters
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