The US Dollar Index advanced 0.49% to 93.58 on Friday, October 20, 2017. It rose 0.64% last week. The US dollar (UUP) is near its two-week high. The US Senate passed the budget resolution on October 19, 2017, which fueled optimism that President Trump’s tax cut plan could succeed. This optimism supported the US dollar and the equity markets (SPY) (DIA). President Trump’s tax reforms aim to reduce taxes on US corporations and households.
Highs and lows
US dollar drivers
The improving US economy, expectations of improving inflation, and tax reforms could drive the US dollar. The Federal Reserve may raise the US interest rates in December 2017, which could also help the US dollar. Bullish momentum in the US equity markets could also help the US dollar.
US dollar and crude oil
The expected appreciation of the US dollar could weigh on crude oil (DWT) (UWT) prices. Changes in oil prices impact oil producers (IXC) (XOP) like EOG Resources (EOG), Stone Energy (SGY), and SM Energy (SM).
Next, we’ll analyze the crude oil price performance in the last 18 months.