(December 03, 2017) The dollar gained against the yen in early Asia on Monday as investors kept a close eye on political developments in the US from the likelihood of tax cuts passed by Congress this year and the ongoing special counsel investigation into Russian meddling in the 2016 election.
USD/JPY changed hands at 112.71, up 0.46%, while AUD/USD traded at 0.7593, down 0.26%. EUR/USD was last quoted down 0.25% to 1.1866.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was last quoted down 0.17% to 92.81.
This week, interest rate reviews in Australia and Canada will be closely watched.
Overnight, the dollar ended lower on Friday as investors weighed concerns over heightened political uncertainty in the U.S. against growing optimism that U.S. Senate Republicans would be able to pass a tax overhaul bill.
The dollar came under pressure following reports that former national security adviser Michael Flynn is prepared to cooperate the special counsel probe into alleged links between the Trump campaign and Russia during last year’s election.
Flynn pleaded guilty Friday morning to lying to the Federal Bureau of Investigation about his communications with the Russian ambassador to the U.S. in December 2016.
The index later pared some of its losses after Senate Majority Leader Mitch McConnell said Republicans had the votes to pass a sweeping tax-overhaul bill after last-minute negotiations to address concerns about the bill’s impact on the federal deficit, healthcare and property taxes.
The Trump administration has said its tax cuts will generate growth and spark inflation, which investors hope will prompt a faster pace of monetary tightening by the Federal Reserve.