By Kevin Buckland and Alun John
TOKYO/LONDON (Reuters) – The U.S. dollar continued its relentless rise on Thursday, trading at a one-year high against major peers and heading for a fifth straight daily gain, fueled by higher rates and Donald Trump’s election victory in the United States.
The dollar climbed above 156 yen for the first time since July, while the euro fell to its weakest since November 2023, last down $1.05310 by 0.32%. The pound sterling reached its lowest level against the dollar in four months at $1.2630.
“It’s all about the dollar and Donald Trump, that’s the story for the currency markets,” said currency strategist Nick Rees at Monex Europe.
Higher trade tariffs and tighter immigration under the incoming Trump administration are expected to fuel inflation, potentially slowing the Federal Reserve’s longer-term rate-cutting cycle.
These, along with expectations for higher deficit spending and higher economic growth in the near term, are driving a rise in Treasury yields, providing additional support to the dollar.
The benchmark reached 4.483% on Thursday, 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 push his agenda.
The , which measures the currency against six major peers including the euro and yen, added 0.3% to 106.79 and briefly reached 107, its highest level since early November 2023.
The dollar fell briefly on Wednesday after a gauge of US consumer inflation met economists’ expectations, leaving the Fed on course to cut rates at their December meeting, although traders saw it as a buying opportunity.
“We think this week’s price action has given us a taste of what’s to come in the currency markets in this second Trump term, with short dollar corrections – such as after yesterday’s US CPI print – being taken as an opportunity to enter structural USD longs at more attractive levels. ,” ING analysts said in a morning note.
Cryptocurrency bitcoin also shot to a record high of $93,480 overnight and, after a brief pullback, rose back to that level on Thursday. Trump has vowed to make the United States “the crypto capital of the planet.”
Elsewhere, the Australian dollar fell to a three-month low following marginally weaker jobs data, reaching $0.6464, but investors reckoned the report was far from weak 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 safe haven has firmed against the euro. The common currency last stood at 0.9371 francs, just off Wednesday’s three-week low.
