The U.S. dollar climbed broadly against its rivals on Wednesday, with the currency hitting nearly four-week highs against the yen, on anticipation that a promised White House announcement on tax reform could boost the greenback.
Top White House delegates introduced President Donald Trump's tax plan Wednesday, a proposal they said would be the "biggest tax cut" in U.S. history.
USD/JPY soared to 111.73, its highest level so far this month, while the EUR/USD fell more than half a percentage point to 1.0855 after hitting a 5-1/2-month high of 1.0950 on Tuesday. The euro rose to match that same high against the dollar in early trading on Wednesday.
Market participants said traders were also taking profit on bearish "short" bets against the dollar and bullish "long" bets on the euro after the dollar had plunged against the euro in recent days following centrist Emmanuel Macron's victory against anti-euro nationalist Marine Le Pen in the first round of France's presidential elections.
Gains for the euro this week have also been spurred by expectations of a change in the direction of European Central Bank policy in coming months. The ECB is set to meet on Thursday.
The Aussie dollar plunged more than 1 percent against the greenback to a more than three-month low of 0.7454 after soft Australian inflation numbers.
Wall Street soared higher as the tax reform was outlined, but failed to hold on to gains and closed flat to lower. USD/JPY also closed lower, ending the day around 111.10.
