* Dollar index clings near Wednesday’s 1-month high
* Euro languishes near its lowest in over a month
* Greenback seen supported by recent rise in US bond yields
By Masayuki Kitano
SINGAPORE, Sept 28 (Reuters) - The dollar traded near a one-month high against a basket of currencies on Thursday, underpinned by hopes that U.S. President Donald Trump’s administration may be making progress on fiscal reforms.
The dollar’s index against a basket of six major currencies last traded at 93.414. The dollar index reached a high of 93.607 on Wednesday, its strongest level since Aug. 23 and has gained about 1.3 percent so far this week.
U.S. President Donald Trump on Wednesday proposed the biggest U.S. tax overhaul in three decades, offering to cut taxes for most Americans but prompting criticism that the plan favors the rich and companies and could add trillions of dollars to the deficit.
The unveiling of the tax plan, coupled with upbeat data on U.S. durable goods orders, helped give an added lift to the greenback, which has benefited from rekindled expectations that the Federal Reserve will raise interest rates again by year-end.
While the dollar has stabilised, helped by a rise in U.S. bond yields, the greenback’s bounce is still far from being a “strong rebound”, said Heng Koon How, head of markets strategy for United Overseas Bank in Singapore.
The U.S. 10-year Treasury yield rose to as high as 2.316 percent on Wednesday, its highest since Aug. 1.
Against the yen, the dollar stood at 112.82 yen, having risen to as high as 113.26 yen on Wednesday, its strongest level in more than two months.
Still, it may be premature to view the greenback’s bounce as a return to a trend of dollar strength, said Teppei Ino, an analyst for Bank of Tokyo-Mitsubishi UFJ in Singapore.
The near-term focus will be on U.S. data such as the personal consumption expenditures (PCE) price index for August due on Friday, as well as U.S. jobs data due next week, Ino said, adding that the dollar-positive mood could change if such indicators come in weak.
The euro held steady at $1.1748, having fallen to as low as $1.1717 on Wednesday, its lowest level in more than a month.
Investor sentiment toward the euro has been dented by Sunday’s German election, where Chancellor Angela Merkel is struggling to form a coalition government.
Elsewhere, New Zealand’s central bank on Thursday kept interest rates unchanged at record lows of 1.75 percent and firmly stuck to its neutral stance, against a backdrop of political uncertainty after an inconclusive national election.
The New Zealand dollar last stood at $0.7228. It slipped briefly to levels below $0.7200 after the central bank statement, but later regained its footing. (Reporting by Masayuki Kitano; Editing by Richard Pullin)