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Mnuchin: August deadline for tax reform 'not realistic at this point'

20 April 2017

A controversial proposal to tax imports while exempting exports remains on the table as the Trump administration mulls an overhaul of the USA tax code, Treasury Secretary Steven Mnuchin told the Financial Times.

The dollar slipped to 108.35 yen, hitting a five-month low.

Mnuchin also acknowledged that one of the key elements in a tax overhaul plan being developed in the House of Representatives, a border-adjustable tax on imports that would give preferential treatment to exporters and to retailers and manufacturers who source goods and raw materials within the United States, is facing resistance from within the administration.

Following these comments from the Treasury Secretary, dollar gained overnight and was up 0.1 percent against yen.

"The talks. are of potentially of significant effect because the tone taken between the USA and Japan on trade really could give us a better idea about how far the U.S.is prepared to go down the road of protectionism", said Jane Foley, currency strategist with Rabobank in London.

He stressed that the USA did not intervene in currency markets, saying: "The president was making a factual comment about the strength of the dollar in the short term.There's a big difference between talk and action".

The senior forex strategist Junichi Ishikawa working at IG Securities in Tokyo said, "For dollar/yen, the main focus will be on what kind of pressure the United States could apply on Japan as basically USA trade policy is linked with a policy for a weaker dollar".

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Demmer said Wednesday: "The German government assumes that the negotiations can be continued without disruption". Willie Rennie of the Liberal Democrats hit out at the Prime Minister's decision not to take part in the debates.

"The yen can not simply continue weakening along with higher stocks under such conditions", he said.

Mnuchin also said in the interview that Treasury intends to impose more sanctions on Syria and North Korea.

Trump campaigned on pushing through a major tax overhaul that lowers rates for consumers and businesses.

Nasdaq 100 e-minis were down 12 points, or 0.22 percent, on volume of 33,948 contracts.

The euro was steady at $1.0643, having seen limited movement on Monday, when many European markets were shut for the Easter holiday. The low reached 2.1966% today.

In what sets the tone for the week ahead, there's little on the economic data front that appears likely to move the Aussie significantly one way or another during Tuesday trade in Asia, including the release of the minutes of the Reserve Bank of Australia's April monetary policy meeting at 11.30am AEST. However, things turned around when US Treasury Secretary Steven Mnuchin contradicted his boss's words about the US dollar.

Mnuchin: August deadline for tax reform 'not realistic at this point'