Dollar rises on Trump tariff hopes, bitcoin retreats after rally
Dollar index rises to near five-month high
Euro sinks to lowest since November 2023
Bitcoin pares gains from record high
New throughout, updates prices, market activity and comments
By Chibuike Oguh and Harry Robertson
NEW YORK/LONDON, Nov 12 (Reuters) - The U.S. dollar rose to a near five-month high against major peers on Tuesday, buoyed by expectations of inflationary import tariffs from Republican President-elect Donald Trump, while bitcoin pared gains from a record rally.
Bitcoin BTC= dropped from a new all-time peak of $89,982 and was last down 0.66% to $87,449.00. Trump has vowed to make the U.S. "the crypto capital of the planet".
"It's still an extension of the post-election moves; the economic calendar has been relatively light although it's picking up later in the week but for now the market is focusing on the implications of a second Trump term, particularly policies that would be positive for the dollar such as potential higher tariffs," said Vassili Serebriakov, an FX strategist at UBS in New York.
Higher tariffs are expected to push up prices, leaving the Federal Reserve less scope to cut interest rates.
The U.S. dollar index =USD, which measures the currency against six peers rose 0.66%to 106.12, hitting its highest level since late June.
With Trump's Republican Party looking poised to take control of the House of Representatives, according toDecision Desk HQ, it will holda slim majority in both houses of Congress, allowingthe president-elect to push his agenda of cutting taxes and regulation after he takes office in January.
"There's been a broad move in the dollar that started before the election and it probably got an added boost because it looks like we're moving to a red sweep scenario, which is broadly seen as positive for the dollar," Serebriakov added.
Trump has warned that the euro bloc will "pay a big price" for not buying enough American exports, with cars a particular target. He has threatened China with blanket 60% tariffs.
Since his election last week, the euro has languished at a seven-month trough and the yuan slumped to its lowest in more than three months, with Europe and China both targets of potential Trump tariffs.
The euro is feeling additional pressure from political uncertainty. Germany, the bloc's biggest economy, is set to hold elections on Feb. 23, which will be 11weeks after the collapse of Chancellor Olaf Scholz's governing coalition.
The euro EUR=EBS sank to $1.0596 on Tuesday, the lowest since November 2023, and was last down 0.53% at $1.0598.
Sterling GBP=D3 dropped 1.04% to $1.2733 after data showed regular UK wage growth slowed and unemployment rose, with the pound also feeling the heat from the dollar's rally.
Against the Japanese yen, the dollar rose 0.66% to 154.73 yen JPY=EBS. The Japanese currency dropped to a three-month low of 154.715 per dollar last week.
The onshore yuan CNY=CFXS finished the domestic session at 7.2378 per dollar, its lowest close since Aug. 1. The Aussie dollar AUD=D3 - which tends to be swayed by the economic outlook for China, Australia's top trading partner - weakened 0.75%versus the greenback to $0.6525.
Bitcoin surges to record high after Trump victory https://reut.rs/4hJM5tR
Reporting by Chibuike Oguh in New York and Harry Robertson in London; Editing by Christian Schmollinger, Shri Navaratnam, Christina Fincher, Alexandra Hudson, Sharon Singleton and David Gregorio
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.
