The cross aborts several bullish attempts before the vote of the US Senate tonight :

EUR / USD remains sucked towards the 1.18 but we note that the bulls seem rather to have things in hand. As if the tax reform was finally something that is already integrated in the courses.

But it seems that a market is always worried about it, not least. This is the US debt market. The US 10-year borrowing rate is on the uptrend and currently exceeds 2.40%.

Meanwhile, the 10-year German rate is close to 0%. And yet, the Euro is still worth more than the Dollar ... Like what, everything is not just a matter of forex rate spread.

This rise in US borrowing rates may be a consequence of this tax reform that will mechanically force Uncle Sam to take on more debt. USD / JPY is up sharply and is a sign that does not deceive because it is this pair that is most sensitive to the spread of borrowing rate.

This prevents the Euro from appreciating too much against the Dollar. After several bullish attempts, we are still close to 1.18. The good performance of US housing starts, up 3.3% while the consensus anticipated a decline of 3.2% is also to put in the balance. Tomorrow you will have to keep an eye on existing home sales.

Of course, the risk tonight will come from the US Senate that will vote on the tax reform. Will the market sell the news? And after all, is this tax reform really good news for the Dollar?

In all cases, movements are erratic on the forex at the end of the year. Prefer to follow the news, take stock, without taking heavy positions.