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The US dollar rose in European trade on Thursday for the first time four days against a basket of major rivals, while trying to recoup from two-week lows on short-covering.

The gains come as concerns about US financial stability receded after the Republican-dominated House of Representatives passed Trump’s tax reform bill and sent it to the Senate. 

Now investors await crucial US data later today, which could provide important clues on the path ahead for Fed interest rates.

The Index

The dollar index rose 0.25% today to 99.87, with a session-low at 99.44.

On Wednesday, the index lost 0.3%, the third loss in a row, plumbing two-week lows at 99.34 on concerns about US financial stability. 

Fiscal Developments

The House of Representatives passed Trump’s tax reform bill in a huge victory for Republicans despite internal divisions, with the bill subjected to dozens of amendments to gain the support of ultra-conservative lawmakers.

The bill enacts huge tax cuts and raises the ceiling of the state and local tax deductions to $40,000, and imposes labor conditions on Medicaid beneficiaries starting 2026.

Despite passing the bill in the House, it still faces a complex path in the Senate as some Republicans there might demand even more changes.

US Rates

US President Donald Trump once again called on the Federal Reserve to cut interest rates in posts on his social media accounts.

Atlanta Fed President Raphael Bostic said earlier this week that he’s leaning towards a single interest rate cut this year.

According to the Fedwatch tool, the odds of a Fed 0.25% interest rate cut in June stood at just 8%.

The odds of a 0.25%% Fed rate cut in July stood at 37%.

Traders now expect 50 basis points overall of Fed rate cuts this year, likely starting in October.

Now traders await a host of important US data later today, including unemployment claims and PMI data.