WTI oil jumped higher after the data to rise to just above $50 a barrel in late session. The dollar stood around 0.5% higher near 4-week highs versus the yen at around 111.60 in late European trading. According to the US Energy Information Administration's weekly report, crude stocks fell by 3.64 million barrels last week versus forecasts of a drop of 1.66 million. Forex Market Review (European Session) – Euro eases from highs; dollar steady ahead of Trump tax plansPosted on April 26, 2017 at 3:02 pm GMT by the XM Investment Research DeskFacebook Google Plus TweetThe euro eased back from its earlier highs in Wednesday's European session, while the US dollar largely held on to its gains as the market's attention shifted to the much-anticipated announcement on tax reforms by the US Treasury Department. After two days of solid gains, the euro succumbed to profit taking as it pulled away from the 5½-month high of 1.0950 touched earlier in the day to ease to around 1.0880 dollars in late European session.
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Trump tax plan (well outline) released
The USDMXN was also impacted as it moved sharply higherThen there was the Trump tax plan. The US yields are lower on the day with most of the move lower coming after the tax plan was announced. In the forex market during the North American session, the dollar moved higher earlier in the day on the expectations of the Trump tax plan, but some of those gains were eroded by the close. The plan also called for 3 brackets instead of 7, repealing the estate and Alternative Minimum Tax and lowering the business tax rate. Some technical highlight for some of our favorite pairs:The EURUSD held above the 200 day MA at 1.0839 (the low could only get to 1.0855) BUT the high after the Trump tax plan stalled at the 1.0900-1.0910 resistance area.
Analysts said traders were disappointed by the lack of new details about the tax reform plan and on skepticism that any comprehensive tax changes will be approved by the House and Senate. The euro had touched $1.0950 in early trading to match Tuesday's 5-1/2-month high before facing selling pressure on hopes that the tax announcement would boost the dollar. The dollar index, which measures the greenback against a basket of six major rivals, was last up 0.2 percent at 99.018 <.DXY>. "It's a long path toward this becoming a policy change, and markets recognize that," he added. U.S. President Donald Trump's plan would cut the income tax rate paid by public corporations to 15 percent from 35 percent and reduce the top tax rate assessed on pass-through businesses, including small partnerships and sole proprietorships, to 15 percent from 39.6 percent.
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