FX round-up: Generally upbeat sterling dips on dollar ahead of Trump tax reforms unveiling

Sterling enjoyed a relatively rosy day on most key crosses, but fell against a resurgent US dollar ahead of US President Donald Trump outlining his proposed tax reforms later on Wednesday.

This after US Treasury Secretary Steve Mnuchin confirmed Trump's tax plan would aim for a cut in corporate tax to 15%, from 35%.

At 17:02 BST, the dollar-spot index was up 0.44% to $99.215, while sterling was down 0.03% to $1.2838.

"The US dollar index managed to claw back some ground today .. in the wake of Mnuchin's comments this afternoon," said Michael Hewson, chief maket analyst at CMC Markets UK.

"Despite the resurgent US dollar the pound continues to hold its own," said Hewson.

He noted the UK currency was likely helped by an opinion poll showing the Conservatives already well ahead of Labour in the countdown to the 8 June general election.

Sterling was up 0.46% to €1.1808, also making convincing headway on the aussie, loonie, kiwi, rand and yen. It was a similar story in the greenback against these currencies.

"Commodity currencies appear to be bearing the brunt of the US dollar rebound with the Australian and New Zealand dollar, getting clobbered quite hard," said Hewson.

However, FXTM research analyst Lukman Otunuga commented that Brexit-related jitters may yet return with a vengeance in the coming weeks if complications arise from the European Union government toughening their negotiation positions.

"(UK Prime Minister Theresa) May is scheduled for a preliminary Brexit showdown with the President of the European Commission, Jean-Claude Juncker, and the EU's Chief Brexit Negotiator, Michel Barnier, this evening which could be an early test," said Otunuga.

"With the topic of the £50bn Brexit bill likely to be key in the meeting, this Downing Street dinner could be one to remember."

Otunuga added that the cable remained trapped in a range on the daily charts.

"Repeated weakness back below $1.2775 could open a path lower towards $1.2600. In an alternative scenario, a daily close above $1.2875 may open a path towards $1.3000."

Markets were already looking ahead to Thursday's European Central Bank interest-rate decision on Thursday, the US Federal Reserve's get together next week, and the second round of France's presidential election in early May.