Dollar sinks as Trump health care blow fuels tax reform fears

The dollar sank with most Asian equities Tuesday as two Republican senators rejected their party’s bill repealing Obamacare, effectively killing it and throwing Donald Trump’s economic agenda into doubt.

Global markets soared for months after Trump’s November election on hopes his big-spending, tax-cutting policies would fire the world’s top economy.

But an ongoing crisis surrounding the White House has hobbled the tycoon’s presidency, with opposition to his controversial health care reforms — crucial to freeing up cash — raising questions about his ability to push other big-ticket measures.

While Republicans have 52 of the Senate’s 100 seats, the opposition to the bill from two members last week was followed Monday by two more. Their decision means the bill has no chance of even getting a vote unless Senate Majority Leader Mitch McConnell makes significant changes to woo sceptics.

Stephen Innes, senior trader at OANDA, said in a commentary: “This headline has massive implications to amend Obamacare and brings a huge element of doubt over the tax reform.

“Equity futures are wobbling, the dollar is selling off. Gold has picked up its allure again given the heightened political risk landscape.”

Tokyo’s Nikkei ended the morning session 0.6 percent lower, with the yen strengthening against the dollar, dragging on Japanese exporters. The market was closed for a holiday Monday.

source: AFP