December 4, 2017 / 3:54 PM / 10 months ago

FOREX-Dollar hits 3-week high vs yen on U.S. tax bill prospects

    * Senate, House likely to meet next week for U.S. tax bill
    * Some analysts are skeptical about tax bill impact on U.S.
    * Markets focused on U.S. non-farm payrolls report

 (Updates prices, adds comment, changes byline, dateline;
previous LONDON)
    By Gertrude Chavez-Dreyfuss
    NEW YORK, Dec 4 (Reuters) - The dollar rose against most
currencies on Monday, hitting a three-week high versus the yen
after the U.S. Senate approved a major tax overhaul over the
weekend that aims to cut taxes for businesses, while proposing a
mixed package of changes for individual Americans.
    "Dollar bulls are pinning their hopes on the sweeping tax
deal leading to a more rapid pace of interest rate hikes from
the Federal Reserve," said Jake Spark, U.S. corporate hedging
manager at Western Union Business Solutions, in Washington.
    The Republican tax legislation would be the largest change
to U.S. tax laws since the 1980s. Republicans want to add $1.4
trillion over 10 years to the $20 trillion national debt to
finance changes that they say would further boost the economy.

    Talks will begin, likely this week, between the Senate and
the House of Representatives, which already approved its own
version of the legislation, to reconcile their respective bills.
    Some market participants, however, were skeptical about how
significant the impact would be on U.S. growth. 
    "We are talking in the region of a 0.2 to 0.3 percent growth
boost annually to what is already a very elevated trajectory of
growth, and we don't expect that to have a major impact on U.S.
interest rates," said Jeremy Stretch, head of G10 FX strategy at
CIBC Capital Markets in London.
    In mid-morning trading, the dollar rose to 113.08 yen
, the highest since mid-November, and was last at 112.83,
up 0.7 percent.
    The euro, meanwhile, also fell against the dollar, down 0.4
percent at $1.1836, pushing the dollar index to trade up
0.4 percent on the day at 93.255
    Investors are also focused this week on a key U.S. non-farm
payrolls report, with analysts forecasting a 200,000 jobs gain
for November versus 260,000 the previous month.
    This would be the last employment report before the Federal
Reserve holds its last policy meeting for the year next week and
markets have already priced in a rate hike for that meeting.  
    However, currency markets expect the Fed to raise rates only
slightly more than twice next year and even though U.S. 10-year
U.S. yields were higher on Monday, they remain effectively
within a 15 basis-point range over the last two months.    
    Sterling, meanwhile, was the only major currency that gained
against the dollar. It traded 0.3 percent higher at $1.3521
 after a member of the European Parliament's Brexit group
said there was a "very good chance" of a deal on an initial
divorce package between Britain and the European Union
    Currency bid prices at 10:38AM (1538 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
 Euro/Dollar      EUR=        $1.1838        $1.1889     -0.43%         +12.60%     +1.1888     +1.1830
 Dollar/Yen       JPY=        112.7900       112.1000    +0.62%         -3.49%      +113.0800   +112.4200
 Euro/Yen         EURJPY=     133.54         133.46      +0.06%         +8.45%      +134.0300   +133.3300
 Dollar/Swiss     CHF=        0.9843         0.9763      +0.82%         -3.29%      +0.9854     +0.9785
 Sterling/Dollar  GBP=        1.3490         1.3470      +0.15%         +9.35%      +1.3538     +1.3420
 Dollar/Canadian  CAD=        1.2691         1.2681      +0.08%         -5.50%      +1.2726     +1.2656
 Australian/Doll  AUD=        0.7598         0.7609      -0.14%         +5.31%      +0.7613     +0.7580
 Euro/Swiss       EURCHF=     1.1656         1.1611      +0.39%         +8.76%      +1.1671     +1.1610
 Euro/Sterling    EURGBP=     0.8774         0.8822      -0.54%         +3.01%      +0.8836     +0.8756
 NZ Dollar/Dolar  NZD=        0.6847         0.6885      -0.55%         -1.35%      +0.6893     +0.6841
 Dollar/Norway    NOK=        8.3278         8.2809      +0.57%         -3.58%      +8.3322     +8.2835
 Euro/Norway      EURNOK=     9.8600         9.8525      +0.08%         +8.52%      +9.8780     +9.8260
 Dollar/Sweden    SEK=        8.4182         8.3582      +0.28%         -7.57%      +8.4285     +8.3696
 Euro/Sweden      EURSEK=     9.9676         9.9399      +0.28%         +4.05%      +9.9747     +9.9318
All spots FX= 
Tokyo spots AFX= 
Europe spots EFX= 
Volatilities FXVOL= 
Tokyo Forex market info from BOJ TKYFX World central bank news
Economic Forecasts... ECON   Official rates...INT/RATE
Forex Diary.......MI/DIARY   Top events........M/DIARY
Diaries...........DIARY Diaries Index........IND/DIARY
Press Digests.....PRESS Polls on G7 economies..SURVEY/
European markets......MARKETS/))

 (Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by
Saikat Chatterjee in London; Editing by Frances Kerry)
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