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Dollar Index sinks following Collapse of Senate Healthcare Bill

Dollar Index Takes a Tumble following failure of Republican Healthcare Bill

The Dollar Index sank to its lowest level since September hitting a 10-month low, after the proposed GOP health care plan defections Monday night in the U.S. Senate.

This does not look good for President Trump’s agenda because the U.S. currency has weakened -0.43%. Euro benefited from the sinking dollar with a record surge of 1.560, the highest since May 2016.

See also: Nancy Pelosi to Paul Ryan: Let’s Work Together on Healthcare.

Rodrigo Catril, a currency strategist at National Australia Bank said that “any hopes of dollar support from a successful vote on the Senate’s health-care bill look to be vanishing.”

The disarray in Republican-controlled Senate rattled financial markets as it cast doubt on the chances of getting President Trump’s other domestic policy priorities such as tax reform, through a divided Congress.

Republicans have a slim 52-48 majority in the Senate and can afford to lose only two members of their caucus.

The United States 10-year bond yields fell after the collapse of the second healthcare bill while German 10-year yields fell two points to 0.57 percent on Tuesday and the Stoxx Europe 600 Index fell following a sullen earnings report from Ericsson AB, which led the decline.

“Tempered expectations for Trump’s spending plans weigh on European bond yields,” Catril said.

Chris Turner, another currency strategist said the dollar weakness came amid the failure of the Republican health care bill to replace Obamacare.

The Yuan gained against the dollar while the Shanghai Composite was 0.6% lower. Dalian Iron Ore jumped 4.8% with futures hitting the highest level since May on strong demand from Chinese steel mills.

There were no Chinese fireworks today and no black Tuesday because Beijing was determined to stop the rout after what appeared to be another political intervention in the last two hours of trading.

The late trading sent the SHCOMP up 0.4%. The Chi Next closed 0.7% higher.


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Contributor, The Liberal Advocate News




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