Bitcoin Soars, Dollar Holds Firm

13 Nov 2024 , 09:42 AM

As markets assessed so-called Trump trades ahead of important U.S. inflation data later in the day, the U.S. dollar stayed close to a 6-1/2-month peak against major rivals, and bitcoin was firmly positioned just below record highs on Wednesday.

Due to investors pricing in the next administration’s perceived inflationary plans of lower taxes and trade tariffs, the dollar is benefiting from Republican Donald Trump’s victory in last week’s U.S. presidential election.

As markets speculate that the Federal Reserve may limit the magnitude of its upcoming rate reduction, the Trump trade has increased U.S. Treasury yields.

Decision Desk HQ predicted Monday that when Trump takes office in January, the Republican Party will likely control both chambers of Congress, allowing him to pursue his program of cutting taxes and reducing the size of the federal government.

Near Tuesday’s peak of 106.17, its highest since May 1, the U.S. dollar index, which compares the currency to a basket of currencies, added 0.02% to 106.01.

After reaching an all-time high of $89,998 on Tuesday, Bitcoin halted its record-breaking ascent, falling 0.23% to $87,105.05 today. Making America “the crypto capital of the planet” is something Trump has pledged to do.

Later in the day on Wednesday, the October Consumer Price Index (CPI) report will be issued, giving investors a new perspective on U.S. inflation.

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