The dollar surged more than 1 percent against the yen and rose broadly on Thursday after comments from US President Donald Trump that he would be releasing his "phenomenal" tax plan in the next few weeks. Investors have been waiting impatiently for details on Trump's campaign trail pledges to inject the US economy with large-scale fiscal stimulus through additional spending and tax cuts.
Trump said his administration will be announcing "something phenomenal in terms of tax" over "the next two or three weeks" during a meeting with airline executives on Thursday. "It's been a broad-based dollar rally driven by the headlines that Trump plans to announce something phenomenal on taxes in the next few weeks, in his words," said Kathy Lien, managing director of BK Asset Management. "That was really the crux of the dollar rally shortly after his election and I think investors are getting really excited about that again."
The dollar gained more than 5 percent against a basket of major currencies in the month and a half after Trump's election but has been on a decidedly downward turn since the new year began as Trump has focused more on trade and immigration than fiscal stimulus. His cabinet picks also have drawn stiff opposition and his travel ban for refugees and citizens of seven Muslim-majority countries was met with large protests around the world. The euro also dipped against the dollar, with political risks, most notably France's upcoming election, nudging it towards its worst week in nearly two months.