Concern at the Fed about the direction of Donald Trump’s administration spread to traders and kept the currency’s behavior firm.
He global dollar strengthened for the third straight session on Thursday as bond yields treasury bonds fell, but remained at high levels, while the pound sterling remained weak amid the changing threat of tariffs on the administration of Donald Trump.
He dollar index —which measures the performance of the greenback relative to a basket of six other internationally relevant currencies— rose 0.12% to 109.15, while the euro fell 0.16% to $1.0301, at a time when the markets’ attention is on the agenda of the president-elect of USA when I return to the White House on January 20, due to expectations that his policies will boost growth and increase inflationary pressures on prices.
Meanwhile, U.S. Treasury yields have been on an upward trend, with the benchmark 10-year bond hitting an eight-and-a-half-month high of 4.73% on Wednesday, as a resilient economy and likely tariffs have revived concerns about inflation and raised expectations that the Federal Reserve adopt a slower path of interest rate cuts.
On Wednesday, the cnn reported that Trump is considering declaring a national economic emergency to provide legal justification for a series of universal tariffs that it would implement on both adversaries and allies. Concerns that policies introduced by the incoming administration could reignite the inflation have pushed bond yields higher, with benchmark 10-year Treasuries hitting 4.73% on Wednesday, their highest level since April 25. It was at 4.6709% on Thursday.
“Trump’s change in speech on tariffs has undoubtedly had an effect on the dollar. “It looks like markets will have to adapt to this whim over the next four years,” he told Reuters. Kieran Williams, director of Asian currencies at InTouch Capital Markets.
Also in the mix were the minutes of the Federal Reserve (Fed) from its December meeting, released Wednesday, which showed the central bank flagged fresh concerns about inflation and officials saw a growing risk that the incoming administration’s plans could slow inflation. economic growth and increase the unemployment.
With US markets closed on Thursday, attention will turn to the US report. payrolls Friday as investors analyze data to assess when the Fed will cut again. rates.
The effect on other currencies
The bond market sell-off has left the dollar standing and casting a shadow over the currency market. Among those most affected was the pound sterling, which weakened 0.46% to $1.2306, in a third consecutive session of declines after hitting its lowest level since November 13, 2023 with the finance minister of Great Britain under pressure as concerns about Trump’s policies have raised the British government’s borrowing costs.
He japanese yen strengthened 0.17% to 158.06 per dollar. Official data released Thursday showed inflation-adjusted real wages in Japan fell for the fourth straight month in November, weighed down by higher prices even as base wages grew at the fastest pace in more than three decades.
Source: Ambito
I am a 24-year-old writer and journalist who has been working in the news industry for the past two years. I write primarily about market news, so if you’re looking for insights into what’s going on in the stock market or economic indicators, you’ve come to the right place. I also dabble in writing articles on lifestyle trends and pop culture news.
