Dollar marches on, Trump trade momentum undimmed
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By Kevin Buckland and Alun John
TOKYO/LONDON, Nov 14 (Reuters) -The U.S. dollar continued its relentless march higher on Thursday, trading ata one-year high against major peers and headed for a fifth straight daily gain fuelled by higher yields and Donald Trump's election victory in the United States.
The greenback climbed above 156 yen JPY=EBS for the first time since July, while theeuro EUR=EBS slumped to its weakest since Nov. 2023 and was last $1.05310 down 0.32%. Sterling GBP=D3 hit its lowest on the dollar in four monthsat $1.2630.
"It's all about the dollar and Donald Trump, that's the story for FX markets," said Nick Rees currency strategist at Monex Europe.
Higher trade tariffs and tighter immigration under the incoming Trump administration are projected to fuel inflation, potentially slowing the Federal Reserve's rate cutting cycle longer term.
These, alongside expectations for deeper deficit spending and higher short term economic growth are lifting Treasury yields, providing the dollar with additional support.
The benchmark 10-year Treasury yield hit 4.483% on Thursday, its highest since July. US/
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 widepowers to push his agenda.
The U.S. dollar index =USD, which measures the currency against six top counterparts including the euro and yen, added 0.3%to 106.79, and briefly touched 107, its highestsince early November 2023.
The dollar had dipped briefly on Wednesday after a measure of U.S. consumer inflation met economists' forecasts, keeping the Fed on track to reduce rates at their meeting in December, though traders saw this as a buying opportunity.
"We think this week’s price action has given us a taste of what’s to come in FX markets in this second Trump term, with brief dollar corrections - like after yesterday’s U.S. CPI print - taken as an opportunity to enter structural USD longs at more attractive levels," said ING analysts in a morning note.
Cryptocurrency bitcoin BTC= also shot to a record high of $93,480 overnight, and, after a brief pullback, was rising back towards that level on Thursday. Trump has vowed to make the United States "the crypto capital of the planet".
Elsewhere, the Australian dollar AUD=D3 fell to a three-month low after marginally weaker jobs data, touching $0.6464, but investors assumed the report was far from weak enough to change the Reserve Bank of Australia's steady policy outlook. AUD/
The Swiss franc CHF=EBS remained under pressure against the dollar, which was up 0.4%at 0.8897 francs, but the alpine safe haven has been firming on the euro. The common currency was last at 0.9371 francs, EURCHF=EBS just off Wednesday's three-week low.
World FX rates https://tmsnrt.rs/2RBWI5E
Reporting by Kevin Buckland in Tokyo and Alun John in London, Editing by Shri Navaratnam, Angus MacSwan and Toby Chopra
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