DXY index likely to head for 96.00 level after rallying through the 94 mark, says Scotiabank

The dollar index is expected to head to the 96.00 level after rallying through the 94.00 mark and the 100-day MA resistance, according to a report from Scotiabank. The USD is still expected to advance versus EM Asian currencies in the weeks ahead on hopes for a tax overhaul, although the ECB’s dovish QE plan has boosted risk-taking. The CNY and SGD have persistently run a right correlation with the EUR.

In addition, the US House of Representatives on Thursday narrowly cleared a budget blueprint on a 216-212 vote. It will allow a tax bill to pass Congress without any Democratic votes by the end of the year. The next step will be releasing a draft tax measure on November 1 by the House GOP.

The outline of a tax plan unveiled in September would cut the corporate income tax rate to 20 percent from 35 percent, reduce individual income tax brackets from seven to three with tax rates of 12 percent, 25 percent and 35 percent, and double the standard deduction to USD 12,000 for individuals and to USD 24,000 for married couples filing jointly.

Dovish Janet Yellen is no longer in the race to serve a second term as chair of the Federal Reserve, Politico reported yesterday, citing a person who talks "regularly" with US President Donald Trump.

The ECB announced on Thursday it would halve its bond-buying programme from EUR 60bn to EUR 30bn a month starting from January and extend existing QE by at least nine months through end-September 2018. Meanwhile, the central bank left its benchmark interest rate and deposit facility rate unchanged at 0.0 percent and -0.4 percent respectively.

Meanwhile, FxWirePro launches Absolute Return Managed Program. For more details, visit http://www.fxwirepro.com/invest