By Amanda Cooper
LONDON (Reuters) -The dollar held steady on Thursday as traders waited for more clarity on new U.S. President Donald Trump’s proposed policies amid an uncertain outlook for interest rates, while bitcoin headed towards $100,000 for the first time.
has enjoyed a blistering rally in recent weeks on speculation that Trump will create an easier regulatory environment for cryptocurrencies.
It hit an all-time high of $97,902 on Thursday, buoyed by a report that Trump’s social media company was in talks to buy crypto trading firm Bakkt. It was last up 2.75% at $97,070.
It was steady at 106.55, not far off last week’s one-year high of 107.07.
“The US is actually still the main driver. It feels a bit like a risk-free morning. The yen is the main winner so far, and I think that’s this week, with Ukraine front and center at the moment,” IG said. Chief strategist Chris Beauchamp said this, referring to an escalation of the conflict between Ukraine and Russia.
The euro, one of the main victims of the dollar’s post-election rise, fell another 0.1% to $1.053275.
European leaders and policymakers are already grappling with the potential fallout from Trump’s proposed tariff increases, while political uncertainty in the region’s largest economies – Germany and France – is adding to this mix.
French far-right leader Marine Le Pen threatened on Wednesday to topple Prime Minister Michel Barnier’s fragile coalition government if her National Rally (RN) party’s cost-of-living concerns were not included in the 2025 budget.
“There are enough things to be concerned about to make people more cautious right now,” Beauchamp said.
The seemingly unstoppable dollar has been helped by sharp swings in expectations for US interest rates. According to CME’s FedWatch Tool, the market currently sees only a 54% chance of a Federal Reserve cut next month, down from 82.5% just a week ago.
A Reuters poll showed most economists expect the Fed to cut rates at its December meeting, with smaller cuts in 2025 than expected a month ago, due to the risk of higher inflation from Trump’s policies.
TRUMP BOMPEL
The dollar has risen more than 2% since the November 5 US presidential election, driven by expectations that Trump’s proposals to raise trade tariffs and cut taxes could reignite inflation and hamper the Fed’s ability to could limit interest rate reductions.
At the same time, traders are assessing what Trump campaign promises on tariffs mean for the rest of the world, with Europe and China both likely to be in the line of fire.
“Right now we’re kind of stuck in a wait-and-worry zone because Trump is busy forming his cabinet,” said Moh Siong Sim, currency strategist at the Bank of Singapore.
“There are a lot of things missing in terms of understanding,” including the timing and scope of the policy, and those details won’t be known for a few months, he said.
Elsewhere, Ukraine fired a volley of British Storm Shadow cruise missiles at Russia on Wednesday, the latest new Western weapon it has been allowed to use on Russian targets, a day after it fired US ATACMS missiles.
With geopolitical tensions running high, the Japanese yen performed better. The dollar last fell 0.6% on the day at 154.52 yen.
The yen has lost about 10% in value in recent months as traders have bet heavily in favor of the dollar given the likelihood that US yields will remain well above Japanese rates for some time to come.
Bank of Japan Governor Kazuo Ueda said Thursday that the central bank will “seriously” take exchange rate movements into account when making its economic and price forecasts.
He noted that there was still a month to go until the BOJ’s next policy meeting in December, adding that there would be more information to process by then.
