The Australian dollar is slightly lower against a stronger but pretty subdued US counterpart ahead of the expected Congressional vote on the Republicans’ tax reform package.
At 0635 AEDT on Wednesday, the Australian dollar was worth 76.63 US cents, down from 76.67 US cents on Tuesday.
Earlier on Wednesday (AEDT), the US dollar rose a little against most currencies on Tuesday, helped by upbeat US housing data, but gains were limited by doubts about the overall impact of a major US tax overhaul plan on the economy.
The Republican-controlled US Congress votes on Tuesday afternoon (US time) on the biggest changes to the US tax system in more than 30 years, with little standing in the way of the party’s first major legislative bill under President Donald Trump.
The greenback earlier in the day gained ground after data showed that US home construction unexpectedly rose to a 13-month peak in November with the building of single-family homes hitting a 10-year high.
Westpac’s Imre Speizer says the US dollar later fell, as US stocks lost their momentum.
‘Equities stalled ahead of the US House vote on tax reform. US bond yields rose sharply, the catalyst technical rather than news-driven, but the US dollar remained subdued,’ he said in a morning note.
‘The US dollar index is 0.2 per cent lower on the day, (while the) AUD fell from 0.7684 to 0.7646.’
He said the only local event risk for the Aussie dollar on Wednesday would be the Westpac-MI Leading Index which previously came in at a 0.44 per cent six month annualised growth rate.
‘Despite the overnight stall it (the local currency) retains upward momentum, the next technical target 0.7730 (a November 2 high), as long as the USD remains restrained,’ Mr Speizer said.
The Aussie dollar is is also down against the euro but up against the yen
CURRENCY SNAPSHOT AT 0635 AEDT ON WEDNESDAY
One Australian dollar buys:
* 76.63 US cents, from 76.67 on Tuesday
* 86.57 Japanese yen, from 86.33 yen
* 64.70 euro cents, from 65.02 euro cents
(*Currency closes taken at 1700 AEDT previous local session)