Dollar Hits Highest Level in Over 4 Months After Trump’s Election Victory

The U.S. dollar reached a four-month high following former President Donald Trump’s election victory, driven by investor optimism about the incoming Republican administration.
Since his decisive win, the dollar has surged as investors expect these policies, if they materialize, to have a positive impact on the nation’s economy and its currency.
While the U.S. economy could end up overheating, the dollar will potentially attract more investors next year, according to ING.
There will be “occasional setbacks” to the dollar’s bull trend. “But the over-arching trend should be a dollar-positive one. And positive enough to see the dollar trade-weighted index break to the upside of a two-year range,” the bank’s report states.
“The prospect of stimulative fiscal policy with fewer Fed rate cuts keeps propelling it higher,” she said.
If these tariffs are levied, it could benefit domestic manufacturing. The measure could also trigger an increase in inflation. As a consequence, the U.S. Federal Reserve may be more hesitant to cut interest rates.
And as long as rates remain high, the U.S. dollar remains attractive to investors, thus boosting its value.
Any erosion in the dollar’s value is expected to be gradual, it said.