Author: Brigid Riley
TOKYO (Reuters) – The U.S. dollar strengthened against its major currencies on Wednesday as investors weighed President-elect Donald Trump’s tariff promises ahead of key U.S. inflation data later in the day.
New Zealand dollar
Trump’s promises on Monday of high tariffs on Canada, Mexico and China, the United States’ three largest trading partners, made investors nervous, although some of the reaction was later softened in the United States.
“Markets are likely to remain unsettled as a second Trump administration brings renewed uncertainty around U.S. policymaking,” said Carol Kong, currency strategist at Commonwealth Bank of Australia (OTC:).
“This uncertainty could prompt markets to ‘sell first and ask questions later,’ which is positive for the US dollar.”
Against its Canadian counterpart, the dollar rose 0.15% to C$1.40755, after hitting a 4-1/2-year high of C$1.4178 on Tuesday.
The dollar remained at its lowest level against the Mexican peso since July 2022, but was last up 0.3% on that date.
“Investors should not overreact given that tariffs are part of a trade negotiation tactic, according to people close to Trump,” said Wei Liang Chang, a currency and credit strategist.
at DBS in Singapore.
The dollar held steady ahead of the October Personal Expenditures Price Index (PCE), which is scheduled to be released on Wednesday, ahead of the close of US markets on the Thursday before Thanksgiving.
The dollar rate, which measures the greenback against six rivals, was last down 0.07% at 106.83.
The yen outperformed on safe-haven offers, rising expectations for Japan’s December interest rate hike and position corrections.
“As we approach Thanksgiving, people are closing deals with Trump, which includes a stronger dollar,” said Shinichiro Kadota, senior currency and pricing strategy specialist at the firm Barclays (LON:) in Tokyo.
Kadota, however, noted that he expects the dollar to strengthen again against the yen next year, given that Trump’s policies are “generally positive” for the US currency.
The dollar recently lost 0.47%, hitting a nearly three-week low of 152.37 yen.
China fell 0.11% to 7.2661 as feeble industrial profits and tariff concerns intensified, while the rate fell 0.08%, returning to its lowest level against the dollar since July 30.
A ceasefire between Israel and the Iran-backed Hezbollah group came into force at 02:00 GMT on Wednesday after both sides accepted an agreement brokered by the United States and France, US President Joe Biden announced on Tuesday. On Tuesday, Israel hit its highest level in three months.
The euro fell 0.10% to $1.0479, while sterling was unchanged at $1.2570.
The Australian dollar settled at $0.6476, up 0.03%, after domestic consumer price inflation remained at a three-year low in October.
The quote amounted to USD 0.58635, which means an augment of 0.5%.
In cryptocurrencies, bitcoin rose just over 1% to $92,692, well below the record high of $99,830 it hit last week. barely crossed the symbolic barrier of $100,000 when profit-taking began.
