Dollar extends gains after Trump tax plan but equities struggle
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HONG KONG, (APP/AFP) - The dollar edged up further in Asia on Thursday as focus turned back to the United States after Donald Trump unveiled his market-friendly tax cut plans.
However, regional equities were unable to track their Wall Street counterparts higher despite a broad move back to riskier assets -- as North Korea went on the backburner -- with Treasury yields rising and safe-haven gold prices slipping.
After months of waiting Trump released a tax reform blueprint that would slash corporate rates, provide relief for firms that repatriate cash from overseas and reduce the number of tax brackets from seven to three.
The tycoon described it as "the largest tax cut, essentially, in the history of our country", while House Speaker Paul Ryan said it was "a once-in-a-lifetime opportunity that is all about more jobs, fairer taxes and bigger pay checks for American families".
Trump's promise to reduce taxes, ramp up infrastructure spending and slash red tape helped drive a global market rally in the months after his November election win. But those gains fizzled as his legislative agenda suffered a series of blows and his White House has become embroiled in a host of crises.
The bill is expected to face a tough passage through Congress, with both sides of the aisle likely to question its affordability.
Still, the unveiling sparked a rally in the dollar as dealers bet such tax cuts would fuel inflation. The unit was already healthy following an indication from Federal Reserve boss Janet Yellen that she was in favour of further hikes.
