TOKYO: The US dollar held steady at a one-year high against major currencies on Thursday, extending gains for a fifth straight day, driven by rising yields and Donald Trump’s election victory.
The greenback climbed above 156 yen for the first time since July. The euro weakened to $1.0546, its lowest since November 2023, while sterling fell to a three-month low of $1.2683.
Trump’s proposed trade tariffs and stricter immigration policies are expected to spur inflation, potentially slowing the Federal Reserve’s rate-cutting trajectory. Anticipated deficit spending under the new administration is also lifting Treasury yields, providing further support for the dollar.
Edison Research projected on Wednesday that Trump’s Republican Party will control both houses of Congress when he takes office in January, granting him considerable power to advance his agenda.
"The USD is a magical currency backed by carry, momentum, growth differentials, and imminent fiscal and tariff boosts," said Chris Weston, head of research at Pepperstone. "While trends don't last forever, an increasingly strong USD could prompt a tradeable selloff only if US economic fundamentals start to weaken." Bitcoin also surged, hitting a record $93,480 overnight and inching back toward that level during Asian trading. Trump has pledged to make the US "the crypto capital of the planet." The US dollar index, which measures the currency against six major counterparts including the euro and yen, rose 0.2 per cent to 106.69, its highest since early November 2023.
The dollar briefly dipped on Wednesday after US consumer inflation data met economists' forecasts, keeping the Fed on track to lower rates at its December meeting. Long-term Treasury yields rose as well, reaching 4.483 per cent in Asia—their highest since July 1. Elsewhere, the Australian dollar dropped to a three-month low of $0.6464 after slightly weaker jobs data.
"Today’s softer jobs growth hints at cooling in Australia’s resilient labour market," said Tony Sycamore, analyst at IG. "This gives the central bank room to keep rates in restrictive territory while focusing on inflation."__Reuters
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