Despite the backdrop of good data indicating that the US economy is showing a larger growth in the second quarter of this year, the US dollar is not in a hurry to win back positions against the euro and the British pound.
According to the final assessment and the report of the US Department of Commerce, the American housekeeper in the second quarter of this year grew by 3.1% per annum, compared to the previous growth of only 3.0% on the former report. Economists predicted that the earlier estimate of 3% would be confirmed.
Major changes in the indicator were made at the expense of a large increase in the capital investment of companies, but this report will not largely affect the overall picture. The main problem is in the hurricanes that hit Texas and Florida which had adverse effects on the economic performance for the 3rd and 4th quarter of this year.
A number of leading economic agencies expect that the US economy in the third quarter will exhibit growth of 1% to 2%. Even so, the US economy will continue to receive good support from the increase of consumer and corporate expenses.
Data on the labor market did not significantly affect the rate of the US dollar. An relevant increase in initial applications for unemployment benefits last week was directly related to job cuts after the hurricanes Irma and Harvey.
According to the U.S. Department of Labor, the number of initial applications for unemployment benefits in the US for the week of September 17 to 23 increased by 12,000 which amounted to 272,000. Economists predicted that the number of applications will reach 275,000.
Today, the market also has a lot to say about the tax reform of Donald Trump, which can lead to the increase of U.S. economic growth, as well as higher borrowings and profits of financial companies.
According to the plan presented by the Trump administration, it was proposed to reduce the tax rate for corporations. This project provides a 20% tax, which can lead to a serious increase in profits, especially in the banking sector.
After the amendment of the tax legislation, a sharp increase in the volume of loans is also expected. This could lead to an increase in the profits of the banking sector. Consequently, the growth of investment in business will create a favorable atmosphere for the labor market.
Despite a significant number of advantages, it is still necessary to do a lot before the real adoption of this tax reform, which can lead to significant changes even in a number of key proposals to reduce the tax rate.
