SINGAPORE: The dollar rose broadly, bolstered by increased optimism about the prospects for U.S. tax reforms, while the New Zealand dollar hit five-month lows, hampered by uncertainty over economic policies under a new government.
U.S. President Donald Trump´s drive to overhaul the U.S. tax code cleared a critical hurdle late Thursday when the Senate approved a budget blueprint for the 2018 fiscal year that will pave the way for Republicans to pursue a tax-cut package without Democratic support.
The dollar rose 0.5 percent on the day to 113.14 yen, having risen to as high as 113.315 yen at one point, its strongest level since Oct. 6.
"There´s still a lot of uncertainty around the timing and the exact kind of reforms that we will see, but it has given a bit of momentum behind that," said Peter Dragicevich, G10 FX strategist for Nomura in Singapore, referring to the approval of the budget blueprint by the U.S. Senate.
The dollar is likely to be supported against the yen in the near-term, Dragicevich said, helped by a widening in U.S.-Japan yield differentials and also since Japan´s general election on Sunday seems unlikely to lead to any surprises for the market.