He global dollar rose in the early hours of Thursday, supported by rising bond yields. treasury bondsputting the yen, sterling and euro under pressure near multi-month lows amid the shifting threat of tariffs.
He dollar index —which measures the performance of the greenback in relation to a basket of six other internationally relevant currencies— rose 0.18% to 109.17 units, close to its two-year high, while the markets’ attention to 2025 has been on the agenda of the president-elect of United States, Donald Trumpwhen you return to the White House on January 20, due to expectations that his policies will boost growth and increase inflationary pressures on prices.
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 Friday’s payrolls report as investors analyze the data to assess when the Fed will cut rates again.
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, which was heading for its biggest three-day drop in almost two years after retreating to $1.2239 on Thursday, its lowest level since November 2023, even as British government bond yields hit multi-year highs.
The massive sell-off in the US government bond markets United Kingdom resumed on Thursday, with 10- and 30-year government bond yields rising again in early trading, as confidence in the country’s fiscal outlook deteriorates. Great Britain.
“A simultaneous massive sale of currencies and bonds is quite unusual for a G10 country,” he considered. Michael Pfister, currency analyst Commerzbank. “It appears to be the culmination of a process that began several months ago. The approval ratings of the new Labor government are at historic lows just a few months after the election, and business and consumer confidence is very depressed,” he added.
He euro also weakened, although less than the pound, to $1.0302, near the two-year low it hit last week, as investors remain concerned about the possibility of the single currency falling to the key 1 mark. dollar this year due to tariff uncertainties.
He yen remained close to the key mark of 160 per dollar that led to Tokyo to intervene in the market last July, after it hit a nearly six-month low of 158.55 on Wednesday.
The dollar in Uruguay regained its positive path
In Uruguay, meanwhile, the dollar increased 0.66% compared to Tuesday and closed at 43,934 pesos in the interbank price of the Central Bank of Uruguay (BCU), thus recovering almost completely from its previous fall and being close to returning to the 44 peso range.
The US currency now accumulates a monthly and annual decline of 0.30% in 2025, since its price was 0.13 pesos below that registered at the end of 2024.
Source: Ambito
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