He global dollar This Wednesday it reached its largest daily increase since March 2020 against its main peers, while bitcoin jumped to an all-time high after donald trump was re-elected president and the Republicans won the Senate, with good results also in the House of Representatives.
He dollar index —which measures the performance of the greenback in relation to a basket of six other internationally relevant currencies— rose 1.67% to 105.10, having reached 105.44, its highest level in four months. The rise of the US currency began after the first signs of a Republican victory in Georgia and the gains have been maintained throughout the European morning.
Analysts consider that the tax, tariff and immigration policies of Trump are inflationary, which drives up the yields of the treasury bondsand, in turn, the dollar. “There has already been a very strong reaction, a strong increase in dollar”, told Reuters Niels Christensen, chief analyst of Nordea. “Expectations of a more flexible fiscal policy and a tight labor market point to greater inflation and higher yields,” he added.
The benchmark 10-year U.S. Treasury yield rose 17 basis points to 4.44571%, a four-month high.
Meanwhile, the euro It fell 1.81% to $1.0732 and was trading at $1.0683, its lowest level since June 27. In turn, the dollar rose 1.85% to 154.41 Japanese yen and reached 154.7, its highest level since July 30.
Furthermore, the dollar jumped more than 3% to 20.8038 mexican pesos, a maximum of more than two years. And it rose up to 1.3%, to 7.1967 yuan, in offshore trade for the first time in almost three months. Mexico and China are among the countries that could be most affected by Trump’s potential tariffs.
In parallel, the bitcoin rose as much as almost 10% to hit a record high of $75,789 as Trump is seen as actively supporting cryptocurrencies which Kamala Harris.
Republicans also gained control of the Senate and made gains in the House of Representatives as the party fought to retain control there, raising the potential for what is known as a “red sweep.” “The probability of a Republican sweep is quite large and that means a more expansive fiscal policy,” he said. Kirstine Kundby-Nielsencurrency analyst at Danske Bank. “A more expansionary fiscal policy and an ‘America First’ approach will support US assets, including the dollar,” he added.
What will happen to rates
It is expected that the United States Federal Reserve (Fed) cut rates by 25 basis points at the conclusion of its two-day meeting on Thursday and investors will also be watching for further clues on whether the US central bank could pause rate cuts. rates in December.
A report of employment much stronger than expected for September led investors to lower their expectations about how many times the Fed is likely to cut rates. A much weaker than expected survey for October has raised some doubts about this view, although this data was clouded by the impact of recent hurricanes and labor strikes.
Traders now estimate a 71% chance that the Fed will also cut rates in December, down from 77% on Tuesday, according to the tool. FedWatch of the CME Group.
Source: Ambito
I am Pierce Boyd, a driven and ambitious professional working in the news industry. I have been writing for 24 Hours Worlds for over five years, specializing in sports section coverage. During my tenure at the publication, I have built an impressive portfolio of articles that has earned me a reputation as an experienced journalist and content creator.
