The US dollar index gained ground against its G7 counterpart currencies this week, after the Senate Republicans in Washington approved a $4 trillion budget for 2018, pushing the Trump administration proposed tax reform plan one step closer. The chamber approved the budget resolution by a vote of 51-49, with US Senators now having to reconcile their budget resolution with a separate one passed by the House. Doing so would allow for the tax overhaul to move ahead quickly, possibly as fast as this week.

Passing a budget unlocks reconciliation, which enables the GOP to pass the Trump administrations tax reform plan, with a simple 51-vote majority in the Senate. The Senate version of the bill would allow for tax cuts to add $1.5 trillion to the deficit over a decade. In contrast, the House called for a revenue-neutral proposal. Republicans hope to pass a bill that broadly chops individual and corporate tax rates and scraps provisions like the estate tax and alternative minimum tax.

The market reaction saw global stock markets moving higher, with Japan’s Nikkei stock index hitting its longest winning streak in more than half a century. In the currency market the US dollar moved to a more-than three-month high against the Japanese Yen, hitting 113.47.

The New Zealand dollar tumbled against the US dollar, Swiss franc, Japanese yen and Australian dollar as Jacinda Ardern of the Labour Party was named New Zealand’s next Prime Minister. New Zealand stock market’s reacted with shock, as the New Zealand First and the Labour Party announced that they had formed a coalition, supported by the Greens. Investors were concerned with some of the looser fiscal policies promised by the Labour Party including their intention to issue $7 billion more in debt than the National party would have and to implement a higher minimum wage and build more affordable housing. Further worries were raised that the Reserve Bank of New Zealand may have to adopt a different policy mandate, which may undermine the strength of the kiwi dollar.