Dollar surges as market awaits Trump’s tax plan

Dollar surges

The dollar held firm in Asian trading on Monday, breaking from a two-week low against the yen but lacking momentum as investors awaited this week’s speech by U.S. President Donald Trump for clues on tax reform.

President Trump will be making his first major policy address to Congress on Tuesday, which is expected to include some details of his infrastructure spending and tax plans. Some market participants worry that a lack of details could disappoint investors and weigh on the dollar.

Treasury Secretary Steven Mnuchin said in an interview that Trump will use the event to preview some elements of his sweeping plans to cut taxes for the middle class, simplify the tax system and make American companies more globally competitive with lower rates and changes to encourage U.S. manufacturing.

The dollar went up 0.1 percent to 112.04 yen, after falling as low as 111.925 yen on Friday, its first foray below the 112 level since Feb. 9.

Lower U.S. Treasury yields have also weighed on the greenback in recent weeks.

The yield on the benchmark U.S. 10-year note skidding to five-week lows last week. It stood at 2.318 percent on Monday, not far from Friday's U.S. close of 2.317 percent.

The value of the dollar's net long position totaled $15.02 billion in the week ended Feb. 21, up from $14.99 billion the previous week.

The dollar index, which tracks the U.S. unit against a basket of six major rivals, benefited from sterling's weakness and edged up 0.1 percent to 101.15.

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