The dollar held onto modest gains against other major currencies on Wednesday, as investors eyed a highly-anticipated tax reform announcement due later in the day from U.S. President Donald Trump’s administration.
EUR/USD slid 0.36% to 1.0895, off a five-month peak of 1.0951 hit overnight.
The dollar was boosted by reports the U.S. tax reform proposals would include cutting the corporate tax rate and lower taxes on offshore earnings of U.S. companies overseas.
The threat of a U.S. government shutdown this weekend also receded after Trump indicated that he is flexible about waiting to secure funding for his promised border wall with Mexico, in a shift that could clear the way for lawmakers to reach a deal.
Investors were also still digesting centrist candidate Emmanuel Macron’s victory in the first round of France’s presidential election on Sunday.
Elsewhere, GBP/USD edged down 0.10% to 1.2828.
USD/JPY rose 0.22% to 111.32, easing off a one-week trough of 110.97 hit earlier in the session, while USD/CHF was almost unchanged at 0.9947.
The Australian and New Zealand dollars were weaker, with AUD/USD down 0.68% at 0.7485 and with NZD/USD declining 0.88% to 0.6894.
Earlier Wednesday, the Australian Bureau of Statistics reported that the consumer price index rose 0.5% in the first quarter, confounding expectations for a 0.6% gain, after a 0.5% rise in the three months to December.
Year-on-year, consumer prices gained 2.1% in the last quarter, compared to expectations for an increase of 2.2%.
Meanwhile, USD/CAD was up 0.11% at 1.3588, after climbing to a 14-month high of 1.3626 on Tuesday amid concerns over an escalating trade dispute between Canada and the U.S.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.21% at 98.93, just off the previous session’s five-month lows of 98.56.