Partner Center Find a Broker

The dollar stabilized on Friday but was set for its biggest weekly drop in a month on disappointment that a landmark U.S. tax bill may be delayed until 2019.

Concern over the outlook of the U.S. tax reforms kept markets in a narrow range. Against a broad trade-weighted basket of currencies, the dollar was flat at 94.48. It was set for its biggest weekly loss since the week ending Oct. 15.

“The uncertainty around the U.S. tax reforms continues into next week and that could lead to further consolidation in the coming days,” said Marc Chandler, global head of FX strategy at Brown Brothers Harriman in New York.

The Senate Republicans’ bill to rewrite the tax code differed from their House counterparts’ plan. Like the House version, the Senate’s proposal would cut the corporate tax rate to 20 percent from 35 percent, but the Senate plan would delay implementation until 2019.

U.S. 10-year yields remain trapped in a 10 basis point range they have traded in this month while realized volatility for EUR/USD on a bi-weekly basis is heading towards its lowest levels since late 2014.

“We are seeing ultra-low volatility ranges in currency markets and unless we see surprisingly higher inflation prints, volatility should be rangebound,” said Joel Kruger, a currency strategist at LMAX Exchange.

U.S. 10-year yields rose four basis points on Friday to 2.38 percent but remained some way from a seven-month high of 2.48 percent hit on Oct. 27.

The delay in the U.S. tax bill prompted Morgan Stanley strategists to reiterate their bearish U.S. dollar call as the delay will “keep U.S. investment spending lower for longer allowing USD investment flows to find their way out of the U.S..”

The dollar was flat at 113.40 against the Japanese yen , down 0.6 percent for the week and well below its eight-month high of 114.737 logged on Monday.

Both plans call for a tax on $2.6 trillion in foreign profits held offshore by U.S. multinationals. The Senate wants that tax to be 12 percent for cash and liquid assets, and 5 percent for non-liquid assets. The House amended its bill on Thursday, going to 14 percent and 7 percent, respectively.

The euro was flat on the day at $1.1644, 0.3 percent higher for the week and holding above a 3-1/2-month low of $1.1553 hit on Tuesday.