The dollar rose on Friday and posted a weekly gain as investors evaluated the likely impact on the American economy of Tuesday’s election of Republican Donald Trump as US president.
Analysts expect Trump’s policy proposals — including more trade tariffs, a clampdown on illegal immigration, lower taxes and business deregulation — will boost growth and inflation.
But in the near term there remains considerable uncertainty over what policies will actually be introduced.
“We don’t really know how much was campaign rhetoric, how much is a negotiating position, how much of it is speaking principle,” said Marc Chandler, chief market strategist at Bannockburn Global Forex in New York. “Part of the volatility we’re seeing in the dollar and in interest rates is that the market is trying to figure it out.”
Republicans also won control of the Senate and are leading the race for the House of Representatives, with some races still to be called.
The dollar index jumped to a four-month high of 105.44 on Wednesday, but has dipped since, partly due to profit-taking. It was up 0.58 percent on the day at 105.01 on Friday and on pace for a 0.68 percent weekly increase.
Data on Friday showed that US consumer sentiment rose to a seven-month high in early November, in a survey taken before the election.
