He euro hit a six-and-a-half month low against the dollar because investors were concerned about possible tariffs that the future government of donald trump in USAwhich would damage the economy of the euro zone.
He dollar opened within striking distance of the levels seen just after the US presidential election. USA against major currencies as markets focused on data and conference speakers Federal Reserve (Fed) and hoped for clarity on future US policy, Reuters reported.
He dollar index rose 0.5% to its highest level since early July, making the gold lose attractiveness for buyers who do not use dollars. Last week, the index rose more than 1.5% to 105.44 following the announcement of Trump’s victory.
Analysts expect that the president-elect’s measures donald trump put upward pressure on inflation and bond yields, while limiting the Fed’s scope to ease policy. However, they see investors trading on economic data and clues about the outlook for rates before seeing what policy rates would actually be. trump in practice.
Market participants warned that the sensitivity of the euro The threat of higher tariffs on American imports was evident Friday night, when the media reported that Trump was lining up Robert Lighthizerconsidered a trade hawk, to direct its trade policy. However, two sources familiar with the matter said Trump has not asked Lighthizer to return to the agency that oversees trade policy.
The single currency fell 0.3% to $1.0685, after hitting $1.0679, its lowest level since late June. “The current thesis of the bears of the dollar is that it will be a while until the tariffs are implemented and the Fed recalibrates toward less restrictive monetary policy,” he said Chris Turner head of foreign exchange strategy at ING.
“We do not agree and we believe that this election result clean can boost American consumer and business sentiment while weighing on business sentiment in other parts of the world,” he added.
Meanwhile, consumer prices in USA will be published on Thursday and a base reading above the 0.3% forecast would further reduce the possibility of an easing of the Fed in December. JPMorgan said it revised its U.S. terminal rate forecast to 3.5% from 3% and expected a 25 basis point cut by the U.S. Fed every quarter, starting in December.
Source: Ambito
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