Dollar soars with bitcoin as Trump trade ramps up; euro, yuan battered
By Kevin Buckland
TOKYO, Nov 12 (Reuters) -The U.S. dollar traded close to a four-month peak versus major peers on Tuesday, while bitcoin extended its record rally as investors continued to pile into trades seen as benefiting from the incoming Donald Trump administration.
The euro languished near an almost seven-month trough reached overnight, while the yuan wallowed close to a more than three-month low with Europe and China both particular targets of potential Trump tariffs.
The U.S. dollar index =USD, which measures the currency against six peers including the euro, rose 0.07% to 105.49 as of 0037 GMT, after reaching 105.70 on Monday for the first time since July 3.
Leading cryptocurrency bitcoin BTC= pushed to a new all-time high of $89,637 on Tuesday. Trump has vowed to make the United States "the crypto capital of the planet".
"If history is any guide, Bitcoin could easily finish the year around $100,000," said Kyle Rodda, a senior financial markets analyst at Capital.com.
Meanwhile, "the expectation of U.S. economic outperformance and aggressive trade practices from the Trump administration continues to push the U.S. dollar higher," Rodda said.
"Markets are dialling back expectations of Fed cuts going forward, with a cut at the December meeting being thrown into question."
Trump's Republican Party will control both houses of Congress when he takes office in January, Decision Desk HQ projected on Monday. That would enable him to push an agenda of slashing taxes and shrinking the federal government.
Potentially inflationary tariffs and immigration policies have seen market odds of a quarter point Federal Reserve interest rate cut on Dec. 18 pared to about 65% from nearly 80% a week ago, according to CME Group's FedWatch Tool.
Trump has warned the euro bloc it will "pay a big price" for not buying enough American exports, with cars a particular target of the incoming U.S. President. He has threatened China with blanket 60% tariffs.
The offshore yuan CNH=D3 dipped as low as 7.2337 per dollar on Monday, the weakest since Aug. 2, before last trading at 7.2241.
The euro EUR=EBS sank to $1.0629 overnight for the first time since April 22, and last changed hands at $1.0658.
The shared currency is feeling additional pressure from political uncertainty in the bloc's biggest economy, Germany. Chancellor Olaf Sholz's remaining coalition partner, the Greens, on Monday joined opposition calls for an earlier parliamentary vote to open the way to a snap election.
Sterling GBP=D3 was little changed at $1.28645.
The yen JPY=EBS edged towards last week's three-month low of 154.715 per dollar, losing about 0.1% to 153.865, following a 0.7% slide overnight.
World FX rates https://tmsnrt.rs/2RBWI5E
Reporting by Kevin Buckland; Editing by Christian Schmollinger
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
