Investing.com - The dollar was higher against most of the other major currencies on Monday after the U.S. Senate passed a tax bill at the weekend, while sterling gained ground on reports of a breakthrough in Britain’s Brexit negotiations.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.34% to 93.13 by 08:50 AM ET (13:51 GMT), after going as high as 93.32 earlier.
The dollar was boosted by expectations that tax cuts for corporations will stimulate the U.S. economy, and also drive Treasury yields higher, as the government becomes more dependent on debt due to reduced tax income.
Talks were due to begin later in the week on reconciling the Senate version of the tax bill with a separate version already passed by the House of Representatives so a final bill can be sent to President Donald Trump to sign into law.
Investors remained cautious amid concerns over the ongoing Russia probe, following reports on Friday that former national security adviser Michael Flynn is prepared to testify against Trump in the ongoing investigation.
Flynn pleaded guilty Friday morning to lying to the Federal Bureau of Investigation about his communications with the Russian ambassador to the U.S. in December 2016. He also admitted to speaking with a top member of the Trump transition team regarding his communications with the ambassador.
The dollar gained ground against the yen, with USD/JPY advancing 0.66% to a two-and-a-half week high of 112.92.
The euro slipped lower against the dollar, with EUR/USD down 0.4% to 1.1848.
Meanwhile, sterling was broadly higher following reports that Britain and the European Union reached a deal on the Irish boarder, which has been a sticking point in divorce talks.
GBP/USD was up 0.33% to 1.3516 from around 1.3426 earlier.
With the clock ticking down to the March 2019 exit date, British Prime Minister Theresa May is under pressure to conclude phase one of the talks in order to start negotiations on future trade ties by the end of the year.
The euro was also lower against the pound, with EUR/GBP down 0.66% to 0.8776.