NEW YORK (Reuters) – The U.S. dollar strengthened against major peers on Thursday, trading at a one-year high and headed for a fifth straight session of gains, propelled by market expectations since Donald Trump clinched a dramatic return to the White House.
Markets anticipate that the incoming Trump administration will impose trade tariffs and tighten immigration as well as deepen the deficit, measures deemed to be inflationary.
The president-elect’s Republican Party will control both houses of Congress when he takes office in January, Edison Research projected on Wednesday, giving him wide powers to push his agenda.
The greenback climbed above 156 yen for the first time since July and was last up 0.56% to 156.38 per dollar. The euro slumped to its weakest since November 2023 and was down 0.45% at $1.05165 in choppy trading. Sterling hit its lowest on the dollar in four months and was last down 0.44% to $1.2651.
Following his election, the market has been looking at Trump’s appointment and seeing that he is not going to compromise on his campaign goals, whether it’s tariffs or China, said Steven Englander, head of G10 FX strategy at Standard Chartered (OTC:SCBFF) in New York. “The market is assuming that he’s going to go ahead and implement all the things that he’s promised to do,” he said.
U.S. producer prices picked up in October, the Labor Department reported on Thursday, a day after data showed that consumer inflation had barely budged last month. The number of Americans filing new applications for unemployment benefits fell last week, suggesting labor market strength, according to the Labor Department.
Federal Reserve Chair Jerome Powell stated on Thursday that there is no urgency for further rate cuts given the robust U.S. economy. His remarks aligned with earlier comments made by Federal Reserve Governor Adriana Kugler and Richmond Fed President Thomas Barkin.
The U.S. dollar index, which tracks the currency against six major peers, including the euro and yen, rose by 0.17% to 106.64, after peaking at 107.07—its highest level since early November 2023. Meanwhile, the yield on benchmark 10-year U.S. Treasury notes dipped by 3.7 basis points to 4.414%.
Bitcoin retreated slightly from its record high of $93,480 but remained up 0.96% at $89,489. Former President Trump has pledged to make the United States “the crypto capital of the planet.” In contrast, Ethereum slipped by 0.27% to $3,144.
The Swiss franc stayed under pressure, with the dollar gaining 0.3% to reach 0.889 francs. The Australian dollar hit a three-month low, sliding to $0.6453 following marginally weaker-than-expected jobs data.
“The price movements align with the election outcome, driven by expectations rather than current realities—anticipations of fiscal stimulus, tariffs, and deregulation,” said Daragh Maher, head of FX strategy for the Americas at HSBC in New York.
“We’ve been bullish on the dollar, so this fits well within our narrative, though clearly, there has been significant repricing,” he added.
