The big question for the coming week is whether the Republicans can drag tax reform over the line. If they can get the bill over the line then it will be a significant impact on markets in the near term and give investors a nice little Christmas gift. We take a look at the outlook for forex, equities and commodities as 2017 comes towards a close.
Moving into the final throws of 2017 markets are struggling for direction. The US dollar rally has run out of steam, breaking developing major forex pairs trends and also gold. However one key factor could drive direction again. For more than a month, the truncated progress of tax reform through Congress has had a wavering impact on the dollar and also Wall Street too. Passing the bill through the Senate looked to open the way, only for concerns over how the two versions of the bill could be brought together for a final vote before winging its way on to the President’s desk. Will the President get a piece of legislation passed in 2017? The outlook is still mixed as several Senators suggest they will struggle to support a revised version. The bill only just scraped through the Senate the first time around 51-49, as Republican Bob Corker dissented. However there are dissenting voices amongst Republican senators still voicing concerns. It seems that somehow extending child tax credit has helped to persuade Marco Rubio of Florida but can they bring in the number below the limit of a $1.5 trillion deficit over 10 years as they struggle to cram everything in to the bill? Illness of senators Cochrane and McCain could also play a factor with such a thin majority. Reaction on Friday suggested they are close but the final week before Christmas will be dominated over whether it can be scraped over the line again. If so the dollar and equities would be boosted.
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