Dollar Gains on Tax Reform Outlook; Euro Sinks on ECB Tapering
- Reinvestment of maturities to be sizable; ‘no sudden stop’
- Dollar also supported by report Yellen out of Fed race
Draghi Says Recalibration of QE Reflects Confidence
The euro fell to the lowest since late July after the European Central Bank said it would extend its asset purchase program at a lower rate. The dollar rallied to its highest since July 12 after the U.S. House passed a budget resolution seen as advancing the prospects for tax reform.
The Bloomberg Dollar Spot Index gained 0.7 percent, and the greenback advanced versus all of its G-10 peers. In contrast, the euro dropped against eight of the same group, falling to 1.1650. The ECB will extend its bond purchases until at least September 2018 at a pace of 30 billion euros per month, broadly in line with expectations. The House resolution narrowly passed amid various contentious issues. A key lawmaker said a tax bill will be released by Nov. 1.