Monthly inflation was also lower than expected and will give greater room for the flexibility of the Federal Reserve’s monetary policy for the remainder of the year.
He dollar rose this Wednesday to a one-year high against the main currencies, driven by the so-called “operations” of the president-elect Donald Trump and after US inflation in October turned out as expected, suggesting that the Federal Reserve (Fed) will continue to lower interest rates.
The dollar hit its highest level since November 2023, boosted by Trump’s victory in last week’s US presidential election, raising expectations of potentially inflationary tariffs and other measures by his incoming administration.
He dollar indexwhich measures the value of the greenback against a basket of currencies that includes the yen and the eurorose 0.43% to 106.44 after reaching a high of 106.53.
At the same time, investors are discounting debt reduction policies. taxes and new duty trade of the incoming administration, measures that are considered inflationary and that could boost the Federal Reserve to limit the scope of your flexibility of interest rates; which pushes up the value of the currency while the Republicans moved a little closer to gaining full control of the Congress, which would give the president-elect more power to push his agenda.
“There is still room for more gains from dollar”, told Reuters Mitul Kotecha, Head of FX and Emerging Markets Macro Strategy at Barclays. The full magnitude of threatened U.S. tariffs on global imports, potential fiscal stimulus through tax cuts and deregulation, as well as data pointing to continued U.S. economic strength next year are factors favoring the dollar, he added.
However, the report of Consumer Price Index (CPI) October showed a monthly variation of 0.2%, less than the 0.3% expected by analysts, and a sign of a new slowdown in the increase in prices. In this way, annual US inflation reached 2.6% year-on-year, which still gives air to the Fed to move forward with new interest rate cuts for the remainder of the year.
The president of the Federal Reserve, Jerome Powell, He is scheduled to speak this week, ahead of wholesale price data on Thursday and retail sales on Friday.
Source: Ambito
