By Amanda Cooper
LONDON (Reuters) – The dollar steadied on Thursday as traders awaited clarity on U.S. President-elect Donald Trump’s proposed policies amid an uncertain outlook for interest rates, while bitcoin edged higher. $100,000 for the first time.
has seen a skyrocketing rally in recent weeks on speculation that Trump will create an easier regulatory environment for cryptocurrencies.
It hit an all-time high of $97,902 on Thursday, supported by a report that Trump’s social media company was in talks to buy cryptocurrency trading company Bakkt (N:). It was last up 3.8% at $98,050.
It rose 0.1% to 106.72, not far from last week’s one-year high of 107.07.
“The US is still the main driver, actually. It looks like a risk-off morning. The yen is the biggest winner so far, and I think that’s this week, with Ukraine front and center right now,” IG said chief strategist Chris Beauchamp, referring to an escalation in the conflict between Ukraine and Russia.
The euro, one of the main victims of the post-election dollar rise, fell 0.2% to $1.0518.
European leaders and policymakers are grappling with the potential ramifications of Trump’s proposed tariff increases, while political uncertainty in the region’s largest economies – Germany and France – adds to the mix.
French far-right leader Marine Le Pen threatened on Wednesday to seek to topple Prime Minister Michel Barnier’s fragile coalition government if her National Rally (RN) party’s concerns about the cost of living were not incorporated into the 2025 budget.
“There are enough things to worry about to incline people to be more cautious right now,” Beauchamp said.
The seemingly unstoppable dollar has been helped by sharp swings in expectations for US interest rates. The market currently sees just a 54% chance of a Fed cut next month, down from 82.5% just a week ago, according to CME’s FedWatch tool.
A Reuters poll showed that most economists expect the Federal Reserve to cut rates at its December meeting, with smaller cuts in 2025 than expected a month ago due to the risk of higher inflation from Trump’s policies.
TRIUMPH
The dollar has risen more than 2% since the US presidential election on November 5, boosted by expectations that Trump’s proposals to raise trade tariffs and cut taxes could reignite inflation and limit the Federal Reserve’s ability to to cut rates.
At the same time, traders are assessing what Trump’s campaign tariff promises mean for the rest of the world, with Europe and China likely in the firing line.
“Right now, we are stuck in a zone of waiting and worrying because Trump is in the middle of forming his cabinet,” said Moh Siong Sim, currency strategist at Bank of Singapore.
“There are a lot of things that are missing in terms of understanding,” including the timing and magnitude of the policies, and those details won’t be known for a couple of months, he said.
Separately, Ukraine fired a volley of British Storm Shadow cruise missiles at Russia on Wednesday, the latest new Western weapon it has been allowed to use against Russian targets, a day after it fired US ATACMS missiles. And Russia fired an intercontinental ballistic missile during an attack on the Ukrainian city of Dnipro on Thursday, kyiv’s air force said.
As geopolitical tensions rise, the Japanese yen has outperformed. The dollar was last down 0.5% on the day at 154.585 yen.
The yen has lost about 10% in value in recent months as traders have bet heavily in favor of the dollar, given the chances that US rates will remain well above Japanese rates for some time.
Bank of Japan Governor Kazuo Ueda said on Thursday that the central bank would take exchange rate movements “seriously” into account when compiling its economic and price forecasts.
He noted that the BOJ’s next monetary policy meeting in December was still a month away, adding that there would be more information to digest by then.