Dollar soars, euro tumbles as Trump wins US presidential election
Dollar index hits four-month high
Trump beats Harris to retake White House
Bitcoin hits record high
Updated at 15:40 EST
By Karen Brettell
Nov 6 (Reuters) -The dollar soared to a four-month high on Wednesday after Republican Donald Trump won the U.S. presidential election, with policies on immigration, tax and trade expected to spur higher U.S. growth and inflation.
Trump beat Democrat Vice President Kamala Harris to retake the White House while Republicans also won a U.S. Senate majority. Control of the House of Representatives remains in question, with Republicans currently holding a majority.
A full sweep by Republicans would allow the party to make larger legislative changes and in turn would likely provoke larger currency moves.
Trump’s policies on restricting illegal immigration, enacting new tariffs, lower taxes and deregulation may boost growth and inflation and crimp the Federal Reserve’s ability to cut rates.
"This can push inflation higher and force the Fed to a slower easing path, which is dollar-positive," said Nikos Tzabouras, senior market specialist at trading platform Tradu.
The euro zone, Mexico, China and Canada are viewed as being at risk of potential new tariffs, which may hurt economic growth in the regions. That would widen their interest rate differentials with the United States and weigh on their currencies.
The euro may also be weighed down by political uncertainty in Germany.
German Chancellor Olaf Scholz sacked his Finance Minister Christian Lindner on Wednesday after weeks of wrangling over the economic direction of the government.
Newspaper Bild had earlier reported that Lindner had recommended early elections as a solution to the budget impasse, a proposal Scholz had rejected.
Nick Wood, head of execution at MillTechFX and Millennium Global notes that currency moves on Wednesday have been orderly, with some market participants holding relatively light positions heading into the U.S. election.
“It seems like elements of the market were actually kind of running quite light in terms of risk, so therefore they can be a little bit more patient in terms of entering positions as opposed to feeling like you're the wrong side of something and having to exit a position at a speed,” he said.
A complicating factor for the dollar outlook longer term, meanwhile, could be that Trump has stated a preference for a weak U.S. currency.
“Both this year, but also during his previous stay at the White House, he had essentially challenged the longstanding strong dollar mantra, because he prefers a weaker currency to help with exports and American economic activity," said Tzabouras.
"And he had also called for lower interest rates, so this could actually pose headwinds for the dollar in the long run as these policies begin to take shape.”
The dollar index =USD was last up 1.66% at 105.09 and reached 105.44, the highest since July 3. The euro EUR=EBS dropped 1.78% to $1.0735and got as low as $1.0683, the lowest since June 27.
The greenback rose 1.92% to 154.5 Japanese yen JPY=EBS and reached 154.7, the highest since July 30.
The Japanese yen could now approach levels that prompted officials to intervene and shore up the currency earlier this year.
Japan's chief cabinet secretary Yoshimasa Hayashi said on Wednesday that the government intended to closely watch moves on the foreign exchange market, including speculative moves, with a higher sense of urgency.
Trump has also expressed favorable views on cryptocurrencies, which helped to lift bitcoin BTC= more than 10% to a record high of $76,134.
The Fed is expected to cut rates by 25 basis points at the conclusion of its two-day meeting on Thursday and investors will also watch for any new clues on whether the U.S. central bank could pause cuts in December.
A much stronger-than-expected jobs report for September led investors to pare back expectations on how many times the Fed is likely to cut rates. A much weaker-than-anticipated report for October has raised some doubts over this view though this data was clouded by the impact of recent hurricanes and labor strikes.
Traders are now pricing 71% odds the Fed will also cut in December, down from 77% on Tuesday, according to the CME Group’s Fed Watch Tool.
The Bank of England is expected to cut rates by 25 basis points on Thursday, while the Riksbank is seen easing by 50 basis points and the Norges Bank is expected to stay on hold.
Markets react to Trump U.S. election win https://reut.rs/3CfrDB3
Additional reporting by Samuel Indyk and Kevin Buckland; Editing by Emelia Sithole-Matarise, Diane Craft and Andrea Ricci
免责声明: XM Group仅提供在线交易平台的执行服务和访问权限，并允许个人查看和/或使用网站或网站所提供的内容，但无意进行任何更改或扩展，也不会更改或扩展其服务和访问权限。所有访问和使用权限，将受下列条款与条例约束：(i) 条款与条例；(ii) 风险提示；以及(iii) 完整免责声明。请注意，网站所提供的所有讯息，仅限一般资讯用途。此外，XM所有在线交易平台的内容并不构成，也不能被用于任何未经授权的金融市场交易邀约和/或邀请。金融市场交易对于您的投资资本含有重大风险。
所有在线交易平台所发布的资料，仅适用于教育/资讯类用途，不包含也不应被视为用于金融、投资税或交易相关咨询和建议，或是交易价格纪录，或是任何金融商品或非应邀途径的金融相关优惠的交易邀约或邀请。
本网站上由XM和第三方供应商所提供的所有内容，包括意见、新闻、研究、分析、价格、其他资讯和第三方网站链接，皆保持不变，并作为一般市场评论所提供，而非投资性建议。所有在线交易平台所发布的资料，仅适用于教育/资讯类用途，不包含也不应被视为适用于金融、投资税或交易相关咨询和建议，或是交易价格纪录，或是任何金融商品或非应邀途径的金融相关优惠的交易邀约或邀请。请确保您已阅读并完全理解，XM非独立投资研究提示和风险提示相关资讯，更多详情请点击 这里。
