The U.S. dollar hit a near four-month high on Tuesday as markets rallied on the prospect of favourable economic policies under Donald Trump’s incoming administration. Bitcoin, meanwhile, surged to an all-time peak, as Trump reaffirmed his vision for the U.S. to become the “crypto capital.”
The U.S. dollar index rose 0.16% to 105.59, nearing Monday’s high of 105.70. Kyle Rodda of Capital.com predicts Bitcoin could reach $100,000 by year-end if trends continue, driven by expectations of U.S. economic outperformance and potential aggressive trade policies.
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Trump’s control over Congress, projected by Decision Desk HQ, bolsters his pro-business agenda. As a result, the market has cut the likelihood of a Federal Reserve rate cut in December from 80% to 69%, given the inflationary risks tied to Trump’s tariff and immigration stances.
The euro, weakened by economic and political concerns, fell to $1.0642, its lowest since April, while the yuan dropped to a three-month low, trading at 7.2469 per dollar. Additionally, the Australian dollar, sensitive to China’s economic outlook, fell 0.33% to $0.65525, and the pound dropped to $1.2841 as markets anticipated UK employment data.
The euro also faces pressure from Germany’s internal politics, as Chancellor Olaf Scholz’s coalition faces calls for an early election, adding further uncertainty to the currency bloc’s economic outlook.
