On Tuesday (November 12), the U.S. dollar climbed to a six-and-a-half-month high against major currencies, with the dollar index rising to 105.96, later reaching 106.17, the highest point since May. After the U.S. election, the market anticipated that Trump would implement higher tariff policies during his second term to increase the price of American products. This expectation also created doubts about the Federal Reserve's room for interest rate cuts, boosting the dollar's strength.
Currently, the dollar index is trading near 106.00 in the Asian market, slightly down by 0.06%. Although economic data is relatively scarce, key data to be released later this week may further influence market trends. Investors are focusing on potential tax cuts and tariff measures in Trump's new term, which are expected to support the dollar's continued rise, especially against the backdrop of Republican control of Congress.
Meanwhile, the euro is under pressure from the dollar's rebound, falling to 1.0596 dollars on Tuesday, a near one-year low. Political uncertainty also weighs on the euro, with Germany holding elections on February 23, adding to future policy direction uncertainties.
The pound also declined, falling to 1.2742 dollars due to rising unemployment and slowing wage growth in the UK, unable to resist the dollar's strong momentum. The dollar rose 0.6% against the yen to 154.63, reaching an intraday high of 154.92, the highest since July. The Australian dollar dropped to 0.6534 dollars, significantly impacted by the outlook of its Asian trading partners.
Analysts point out that the market is digesting the outlook of Republican control of Congress, which is widely seen as beneficial for the dollar. There remains a focus on the potential impact of tariffs and anti-immigration policies on inflation. Investors are also awaiting the U.S. CPI data to be released on Wednesday.
