Early trade in New York: dollar stays near one-week high against basket of currencies

The dollar was holding near a one-week high against a basket of currencies on Monday, with traders wary of pushing it higher because of a proposed US tax overhaul and uncertainty about the composition of the US Federal Reserve. The dollar index, which tracks the greenback against six major currencies, was up 0.04 percent at 94.982. The index is just shy of the three-month high of 95.150 hit late last month.
The dollar was 0.04 pct higher against the Japanese yen, and the euro was 0.16 percent lower against the greenback. "In the absence of any major external drivers, it is more of a sideways market when it comes to the dollar," said Mazen Issa, senior FX strategist at TD Securities in New York. "Between now and the end of the year, we still have to deal with the tax bill, the Fed (Open Market Committee), and obviously there are some uncertainties around trade policy as well."
House Republicans last week unveiled the first draft of a bill that, if enacted, would be the biggest revamp of the US tax system since the 1980s. The House tax-writing committee begins revising the bill on Monday, with tweaks and some more substantial changes expected to a number of individual and corporate tax proposals.
The dollar benefited from Commodity Futures Trading Commission data from late on Friday that showed net short positions in the currency had dwindled to their smallest in 15 weeks. Sterling rose 0.28 percent against the dollar, recovering some ground from a one-month low hit after the Bank of England raised its lending rate for the first time in a decade last Thursday but forecast only gradual tightening ahead.