• The dollar index, which tracks the U.S. currency against six major peers, was weaker, trading at 93.467 at 8:44 a.m. HK/SIN. Compared with stocks, the greenback has had a subdued reaction to tax reform optimism, although the dollar index had begun the week around the 94 handle.
Against the yen, the dollar edged up to trade at 112.97.
• The U.S. House of Representatives initially passed the tax legislation in an afternoon vote, but the bill included provisions that did not comply with Senate rules. The Senate was expected to vote this evening on a revised version of the bill, with the offending provisions removed. If the Senate approves the bill, as is expected, the House will vote again on Wednesday.
• The U.S. tax overhaul that looks set to get a final nod from Congress on Tuesday will give the economy a bit of a lift next year, but will have little lasting impact, according to a brief analysis from the Federal Reserve Bank of San Francisco.
“If Congress passes the tax reform legislation by the end of this year or early next year, we expect a modest boost to GDP growth in 2018 and 2019,” senior research advisor Zheng Liu wrote in the regional Fed bank’s latest edition of FedViews, prepared ahead of the Fed’s policy-setting meeting last week but not made public until this week. “We expect real GDP to grow at an average annual rate of about 2.25 percent through 2018, before slowing to 1.75 percent in 2019.”
• The U.S. Congress is struggling through another contentious week as infighting over defense spending, healthcare and other matters complicates the drive to pass a temporary spending bill by midnight on Friday to avert a partial government shutdown.
• Brent crude LCOc1 settled up 39 cents or 0.6 percent at $63.80 a barrel. U.S. crude CLc1 settled up 30 cents or 0.5 percent at $56.46.
Oil edged up toward $64 a barrel on Tuesday, helped by a North Sea pipeline outage, OPEC-led supply cuts and expectations that U.S. crude inventories had fallen for a fifth week.
But rising U.S. output has put a lid on gains. Shale production will rise to a record in January, according to a government forecast published on Monday, as higher prices encourage increased drilling.
Reference: Reuters, CNBC
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