The dollar rises while the yen and euro fall, with markets attentive to Trump’s policies, possible intervention by the Bank of Japan and a favorable environment for cryptocurrencies.
The dollar rebounds from one-week lows on Wednesday as the Japanese yen tumbles, reflecting a shift in market sentiment toward safe-haven assets. Investors remain attentive to the possible economic policies that the president-elect of the United States will implement, Donald Trump.
The brief recovery of the yen and other safe haven currencies, such as the dollar, lost steam after statements by the Russian Foreign Minister, who assured that Moscow will “everything possible” to avoid a nuclear war. This comment came after Russia announced a reduction in the threshold for resorting to a nuclear strike, which had initially raised tensions.
The Japanese yen fell to 155.67 per dollar, hitting a three-month low. This move intensified expectations of possible intervention by the Bank of Japan, given that the current level is close to that recorded in July, when authorities intervened in the currency market.
Currency basket
The dollar index, which measures the strength of the greenback against six major currencies, rose 0.3% to 106.42, recovering after three consecutive days of declines. Last week, it hit a one-year high of 107.07, boosted by expectations that the Trump administration will implement expansionary tax policies, higher tariffs and stricter immigration controls. These measures could stoke inflation and slow any easing by the Federal Reserve.
In the political sphere, the markets were awaiting the announcement from the Treasury Secretary in the Trump administration. This appointment, key to the country’s economic policies, has generated speculation due to the limited experience in the financial sector of some of the candidates considered.
On the other hand, expectations of a rate cut by the Federal Reserve in December continued to decline, with the probability of just 59.1%, according to CME’s FedWatch tool, compared to 82.5% the previous week.
Donald Trump Thumbs up
In Europe, sterling showed a slight rebound following the release of better-than-forecast inflation data in October, reinforcing the idea that the Bank of England will proceed cautiously with future rate cuts. Meanwhile, the euro fell 0.3% to $1.056, although it managed to recover from a recent low of $1.0524.
In the cryptocurrency space, Bitcoin was nearing all-time highs, approaching $94,000, driven by expectations of a more favorable regulatory environment under the Trump administration. Additionally, it was reported that the president-elect’s social media company could be in negotiations to acquire Bakkt, a cryptocurrency trading platform, further fueling optimism in the sector.
Source: Ambito
I am an author and journalist who has worked in the entertainment industry for over a decade. I currently work as a news editor at a major news website, and my focus is on covering the latest trends in entertainment. I also write occasional pieces for other outlets, and have authored two books about the entertainment industry.
