TOKYO- The US dollar stood at a one-year high against major peers on Thursday and headed for a fifth straight daily gain fueled by higher yields and Donald Trump’s election victory.
The greenback climbed above 156 yen for the first time since July. The euro slumped to its weakest since Nov. 2023 at $1.0546 and sterling hit its lowest on the dollar in three months at $1.2683.
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. Expectations for deeper deficit spending are lifting Treasury yields, providing the dollar with additional support.
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 sweeping power to push his agenda.
“The USD is a magical currency backed by carry, momentum, growth differentials, (and) impending fiscal and tariff kickers,” said Chris Weston, head of research at Pepperstone.
“While trends don’t last forever, until US economics start to break down, it’s likely that an increasingly rich USD position proves to be the primary factor that could cause a tradeable selloff.”
Cryptocurrency bitcoin also shot to a fresh record high of $93,480 overnight, and was rising back towards that level in Asia’s day. Trump has vowed to make the United States “the crypto capital of the planet”.
The US dollar index which measures the currency against six top counterparts including the euro and yen, added 0.2 percent to 106.69, its highest since early November 2023.
The dollar had dipped briefly on Wednesday after a measure of US consumer inflation met economists’ forecasts, keeping the Fed on track to reduce rates at their meeting in December
