Authors: Kevin Buckland and Alun John
TOKYO/LONDON (Reuters) – The U.S. dollar continued its relentless march higher on Thursday, hitting a one-year high against major peer markets and heading for a fifth straight daily gain, driven by higher yields and Donald Trump’s U.S. election victory.
The dollar rose above 156 yen for the first time since July, while the euro fell to its lowest level since November 2023 and last touched $1.05310, down 0.32%. The pound sterling hit a four-month low for the dollar at $1.2630.
“It’s about the dollar and Donald Trump, that’s the history of currency markets,” said Nick Rees, currency strategist at Monex Europe.
Higher trade tariffs and tighter immigration under the novel Trump administration are expected to fuel inflation, potentially slowing the Federal Reserve’s interest rate cut cycle in the longer term.
This, along with expectations of deeper deficit spending and higher near-term economic growth, are lifting Treasury yields, providing additional support for the dollar.
On Thursday, the benchmark reached 4.483%, the highest level since July. [US/]
The president-elect’s Republican Party will control both houses of Congress when he takes office in January, Edison Research predicted Wednesday, giving him broad powers to advance his agenda.
The index, which measures the currency against six major currencies including the euro and yen, rose 0.3% to 106.79 and briefly touched 107, the highest since early November 2023.
The dollar briefly fell on Wednesday after a measure of U.S. consumer inflation met economists’ forecasts, keeping the Fed on track to cut interest rates at its December meeting, although investors saw it as a buying opportunity.
“We believe this week’s price action has given us a preview of what’s to come in FX markets in Trump’s second term, with miniature dollar corrections – as after yesterday’s US CPI print – treated as an opportunity to go structurally long in USD on more attractive levels – ING analysts wrote in a morning note.
The Bitcoin cryptocurrency also hit a record high of $93,480 overnight and rose to that level again after a brief decline on Thursday. Trump has promised to make the United States the “crypto capital of the planet.”
Elsewhere, the Australian dollar fell to a three-month low on slightly weaker jobs data, hitting $0.6464, but investors assumed the report was not frail enough to change the Reserve Bank of Australia’s stable policy outlook. [AUD/]
The Swiss franc remained under pressure against the dollar, which rose 0.4% to 0.8897 francs, but the Alpine sheltered haven was strengthening against the euro. The common currency recently hit 0.9371 francs, just near Wednesday’s three-week low.
