Dollar jumps on US tax-cut passage

The dollar advanced against major rivals Monday after US senators squeezed through a tax-cut bill at the weekend.

Elsewhere, European stock markets rallied and Asian indices diverged as traders watched a Brussels summit on Brexit and digested news that a former aide to Donald Trump had agreed to co-operate with a probe into Russian election interference.

Wall Street opened in the green, with the Dow shooting higher 1.0 percent in the first minute of trading.

“US stocks are adding to last week’s strong gains in early action, with Saturday’s passing of the Senate’s tax reform bill boosting optimism…” said analysts at Charles Schwab brokerage.

In afternoon European trading the DAX 30 in Frankfurt jumped 2.0 percent and the CAC 40 in Paris climbed 1.5 percent.

A strong pound limited the gains to London’s FTSE 100 to 0.5 percent.

Earlier in Asia, Hong Kong ended higher but there were falls for Tokyo and Shanghai.

Oil prices were down after Friday’s rally in reaction to a decision by crude producers to extend a period of production limits.

Bitcoin meanwhile reached a fresh all-time high Monday, at $11,845.33, after a US regulator cleared the way for futures in the unit to trade on major exchanges.

The Chicago Mercantile Exchange — the world’s biggest futures exchange — has said it will launch futures contracts on December 17.

“The fact that CME — the biggest kid on the block — is moving early into cryptocurrency will force other major exchanges to follow suit in the fear of not missing out,” said Shane Chanel at ASR Wealth Advisers.

The unit has risen 15-fold since the start of the year.

In foreign exchange trading meanwhile, “the US dollar began the week on the front foot after the… tax plans were approved, opening the door to a vast fiscal stimulus for the US economy”, noted Neil Wilson, senior market analyst at ETX Capital.

After marathon talks in Washington lawmakers finally passed controversial reforms to the tax system, which the president says will fire up the world’s number one economy.

The greenback strengthened against the yen and the euro, though dealers remain reticent as both houses of Congress must reconcile their differing bills before sending a final draft to the White House, while analysts also warned of political risk.

“If the legislation gets ratified quickly, there would likely be another dollar bounce, but the longer this drags out, the dollar will probably sell off as political uncertainty has been the greenback’s undoing over and over again…

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