The United States of America dollar soared to its highest level in two weeks on Thursday, December 7. The U.S. currency earlier slipped against the safe-haven Japanese yen.
The drop came after U.S. President Donald Trump said on Wednesday he would recognize Jerusalem as the capital of Israel – a move that imperiled Middle East peace efforts and provoked widespread condemnation.
The greenback gained almost half a percent against the yen to trade at 112.72 yen =JPY and hit a two-week high against a basket of peers. .DXY
Underpinning some of the dollar’s gains, analysts said, was cautious optimism on U.S. tax legislation. On Wednesday, Senate Republicans agreed to talks with the House of Representatives on their two tax bills. Early signs are they can agree on a final bill before a self-imposed Dec. 22 deadline.
“The corporate tax reform has the potential to have a significantly positive effect on the greenback, but due to other parts of the reform – those that are aimed at preventing tax base erosion,” wrote Commerzbank currency strategists in a note to clients.
“It is still unclear how this part of the reform will be designed … so we might end up with something that was not included in either of the proposals. It is therefore far from certain how much of a dollar-positive effect the tax reform will result in.”
Upbeat U.S. private-sector employment data released on Wednesday also provided some support to the dollar. But strategists said the currency would trade in narrow ranges until the release of the closely watched non-farm payrolls report on Friday.
Bitcoin soared to a record high of $14,870 on the Bitstamp exchange, continuing a staggering surge from less than $1,000 at the beginning of the year.
