Dollar pushes higher on hopes for US tax reforms

SINGAPORE: The dollar hit a one-month high against a basket of currencies on Thursday, underpinned by hopes that US. President Donald Trump's administration may be making progress on tax reforms.

The dollar index, which measures the greenback  against a basket of six major currencies, rose 0.2 percent to 93.575.

It touched a high of 93.613 at one point, its strongest level since Aug. 23.

Trump on Wednesday proposed the biggest US. tax overhaul in three decades, offering to cut taxes for most Americans but prompting criticism that the plan favours the rich and companies and could add trillions of dollars to the deficit.

The proposal faces an uphill battle in the US. Congress, with Trump's own Republican Party divided over it and Democrats hostile.

But the unveiling of the plan, coupled with upbeat US. durable goods orders, helped give an added lift to the greenback, which has benefited from rekindled expectations that the Federal Reserve will raise interest rates again by year-end.

"I think the market's views toward the US. had become too pessimistic," said Masashi Murata, currency strategist for Brown Brothers Harriman in Tokyo.

"That view is being re-assessed and bond yields are rising so dollar-buying could continue for a while," Murata said.

The greenback's rise gained renewed momentum in Thursday's Asian trade as US. bond yields pushed higher.

The US. 10-year Treasury yield rose to 2.344 percent at one point on Thursday, its highest level since mid-July.

Including Wednesday's move, the US. 10-year yield has risen more than 11 basis points -- putting it on track for its biggest two-day rise in nearly seven months.

The movement in US. Treasuries probably gained steam due to stop-loss selling, said Satoshi Okagawa, senior global markets analyst for Sumitomo Mitsui Banking Corporation in Singapore.

The resulting rise in US. bond yields was giving a broad lift to the dollar, he added.

The dollar rose 0.2 percent to 113.05 yen, nearing Wednesday's high of 113.26 yen, the greenback's  strongest level in more than two months.

Emerging Asian currencies came under pressure as US. bond yields rose.

The Indonesian rupiah fell to 13,550 per dollar at one point, its lowest level in nearly 10 months.

The euro also faltered, easing 0.1 percent to $1.1733 , languishing near a one-month low of $1.1717 set on Wednesday.