Investing.com - The dollar held steady against other major currencies in cautious trade on Tuesday, amid ongoing political woes in Germany and uncertainty over a major tax reform plan in the U.S.
Investors remained cautious amid ongoing uncertainty over the fate of a major U.S. tax overhaul. The House of Representatives passed a bill last week that would lower corporate taxes and cut individual taxes for most households in 2018.
However the legislation could still face difficulties in the Senate amid resistance within Republican ranks. Senate lawmakers are expected to vote on their version of the bill after this week’s Thanksgiving holiday.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was steady at 94.01 by 05:15 a.m. ET (09:15 GMT).
The euro and the pound were little changed, with EUR/USD at 1.1731 and with GBP/USD at 1.3236.
Sentiment on the euro remained fragile after German Chancellor Angela Merkel failed to form a government coalition on Sunday, when the Free Democrats Party (FDP) unexpectedly left the negociation table.
German President Frank-Walter Steinmeier urged politicians to resume negotiations and called the impasse the worst in Germany’s post-war history.
Merkel said she would prefer a new election to leading a minority government.
Meanwhile, data showed that the UK’s public finances rose more than expected in October.
Elsewhere, USD/JPY slipped 0.16% to 112.44, while USD/CHF held steady at 0.9931.
The Australian and New Zealand dollars were stronger, with AUD/USD up 0.24% at 0.7568 and with NZD/USD adding 0.10% to 0.6815.
In the minutes of its November policy meeting released earlier Tuesday, the Reserve Bank of Australia said the outlook for the economy remained on track and that no rate hikes are expected in the near term.
Meanwhile, USD/CAD edged down 0.12% to 1.2805.