Investing.com – The U.S. dollar rose on Monday, continuing the positive tone generated by the fresh Trump presidency ahead of the release of key inflation data and ahead of several Federal Reserve speakers scheduled for this week.

At 04:20 ET (09:20 GMT), the Dollar Index, which tracks the dollar against a basket of six other currencies, was trading 0.3% higher at 105,207, after rising 0.6% last week.

The dollar remains powerful

The dollar rose to a four-month high last week after Donald Trump announced his return to the White House and his tariff and immigration policies were deemed inflationary, likely prompting the Federal Reserve to cut interest rates more slowly and shallowly.

Although the dollar’s rise was tempered by the Federal Reserve’s interest rate cut, it still retained most of its recent gains.

“The thesis for dollar bears currently is that tariffs will take time to implement, and that the Federal Reserve’s recalibration to a less restrictive monetary policy – plus year-end seasonal dollar patterns – could result in a mild decline in the value of the dollar at the end of the year,” they wrote in a note ING analysts.

“We disagree and believe this clean election result has the potential to lift U.S. consumer and business sentiment while impacting business sentiment in other parts of the world.”

Trading is likely to be delicate Monday (NASDAQ:) due to the closure of US bond markets for a public holiday, with attention to the release of October data on Wednesday.

Many Federal Reserve officials will also speak this week, after the bank cut interest rates by 25 basis points last week.

Euro exchange rate down

In Europe, it fell 0.3% to 1.0688, hit by Trump’s proposals for import tariffs that could hurt European exports, as well as political turmoil in Germany, the euro zone’s largest economy.

German Chancellor Olaf Scholz fired his finance minister last week, paving the way for early elections after months of disagreements in his three-party coalition.

The latest reports suggest that “a vote of no confidence could be held in December, and early elections could be held as early as February. It seems like a leap of faith to expect a complete turnaround in Germany’s fiscal situation at this stage, but instead the onus will be on the European Central Bank to support the eurozone economy,” ING added, expecting the ECB to cut 50 basis points this year in December.

fell 0.2% to 1.2900 after Thursday’s second rate cut since 2020, falling 25 basis points to 4.75% from 5%.

BoE Governor Andrew Bailey delivers a major speech at Mansion House on Thursday as investors seek monetary policy guidance amid the Labor government’s expansionary budget.

“Given that the UK economy is performing quite well and Donald Trump’s policies may prove inflationary, Bailey may not want to repeat his narrative that UK interest rates may be cut faster than expected,” ING said.

Yuan loses after fresh debt package

rose 0.2% to 7.1934, remaining near three-month highs after China’s National People’s Congress outlined plans for greater fiscal spending.

Last week, the NPC approved a 10 trillion ($1.4 trillion) debt package aimed at reducing local government debt levels. However, this solution disappointed investors hoping for more targeted fiscal measures.

rose 0.8% to 153.83, with the yen falling after the Bank of Japan’s October meeting showed policymakers divided on further interest rate increases, creating greater uncertainty over when the BOJ will raise interest rates again.

The uncertainty bodes ill for the yen, which was already weakened by increased political uncertainty in Japan after the country’s ruling Liberal Democratic Party lost its parliamentary majority last month.