Dollar climbs on tax outlook

The dollar climbed, Treasuries fell and U.S. stocks posted a sixth straight weekly gain on bets President Donald Trump was closer to pulling off one of his biggest legislative priorities after the Senate approved a budget vehicle for tax cuts.

All three U.S. equity benchmarks hit records. The dollar reached a threemonth high and 10-year Treasury yields approached 2.4 percent amid speculation Trump was moving closer to selecting the next Federal Reserve chief.

“A lot of the story line we have been talking about this year is now playing out,” said Mike Wilson, Morgan Stanley’s chief U.S. equity strategist. “We’re going to have a good quarter of earnings again, we now are getting closer to the Fed chair certainty. We have the budget resolution, which is a big step in the direction of tax cuts.”

European shares erased some of Thursday’s losses on the back of rising metal prices and positive corporate earnings. The euro slipped as investors eyed political developments in Spain and negotiations over Britain’s departure from the European Union. The Canadian dollar tumbled after inflation and retail sales trailed estimates.

People familiar with the process of selecting the next Fed chief said Trump’s advisers are steering him toward either Jerome Powell, a member of the Fed Board of Governors, or Stanford economist John Taylor. Trump’s goal of rewriting tax laws took a major step forward as the Senate narrowly approved a budget vehicle that could pave the way for a bill.

Meanwhile, sales of previously owned U.S. homes increased unexpectedly in September, showing demand is stabilizing in the aftermath of hurricanes Harvey and Irma.

The S&P 500 Index added 0.5 percent at the close of trading in New York.