US Tax Bill Nears Finish Line; Canadian Economic Data Bolsters Loonie
Published December 20, 2017
The US Senate voted 51-48 in favour of passing the Republican tax cut plan in the early hours of Wednesday morning; the plan is the most extensive rewrite of the US tax code, creating massive cuts for US corporates (35% tax rate down to 21%) and cuts for individuals as well.
The bill also passed in the US Congress yesterday afternoon as representatives voted along party lines to ensure its passage. The Congress version of the bill differed from the Senate’s; US representatives will need to vote again this afternoon to confirm the Senate’s changes.
The final passage of the Republican tax bill is widely expected to be completed this afternoon; US President Donald Trump has scheduled a news conference at 1:00 PM EST at the White House to commend his administration’s first major legislative victory since taking office this year.
Celebrations may be cut short, however, as US politicians now must focus on avoiding a government shutdown by passing a temporary spending bill; lawmakers have until Friday to finalize a deal that satisfies both Republicans and Democrats.
USD/CAD moved to the low 1.2800s this morning as both investor weariness over the tax bill and strong economic data out of Canada pushed the rate lower; month-on-month Wholesale Sales in Canada showed strong growth of 1.5% versus expectations of 0.5%.
Buyers fatigue is also starting to weigh on equities as trades start to thin before the December holidays; the Nasdaq reached record highs earlier this week, however, failed to close at these all-time highs for the past two trading days.