Dollar Gains Broadly After Trump Says to Announce Major Tax Plan

The dollar rose across the board on Thursday, posting its best one-day gain against the yen in three weeks, after comments from U.S. President Donald Trump that he would make a major announcement on a "phenomenal" tax plan in the next few weeks.

The greenback advanced against the euro in three of the four last sessions, as well as climbing to more than one-week highs versus the Swiss franc. Gains were boosted by Thursday's upbeat U.S. economic data.

Investors have been waiting impatiently for details on Trump's campaign trail pledges to inject the U.S. economy with large-scale fiscal stimulus through additional spending and tax cuts.

In a meeting with airline executives, Trump said on Thursday his administration will announce "something phenomenal in terms of tax" but offered no details.

"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 in New York.

"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 downtrend this year 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.

That gave investors pause as many worried his fiscal agenda would take a back seat or face more stringent opposition in Congress. But Thursday's announcement helped push the dollar back on an upward track.

In afternoon trading, the dollar rose 1.2 percent against the yen to 113.27, after hitting a high of 113.29, its strongest level since Feb. 3.

The greenback was also bolstered by U.S. data showing initial jobless claims unexpectedly fell last week to a near 43-year low, while inventories at wholesalers surged in December for a second straight month.

The dollar index gained 0.4 percent to 100.64, with the greenback rising 0.6 percent to 1.0012 Swiss francs.

The New Zealand dollar suffered major losses, falling more than 1 percent after its central bank signaled that any rate tightening might be at least two years away.

The euro also dipped against the dollar, down 0.4 percent at $1.0656 with political risks, most notably France's upcoming election, nudging it toward its worst week in nearly two months. (Reporting by Gertrude Chavez-Dreyfuss and Dion Rabouin; Editing by Lisa Shumaker)