Dollar and Bitcoin Rally, Euro and Yuan Weaken

12 Nov 2024 , 10:31 AM

As investors piled into bets perceived to benefit from the new Donald Trump administration, bitcoin maintained its record surge, while the U.S. dollar hovered near a four-month peak against major rivals on Tuesday.

With Europe and China specifically targeted by possible Trump tariffs, the euro sank to a nearly seven-month low overnight, and the yuan sank to a low of more than three months.

On Monday, the offshore yuan fell as low as 7.2337 to the dollar.

After hitting 105.70 on Monday for the first time since July 3, the U.S. dollar index, which compares the currency to six rivals, including the euro, increased 0.07% to 105.49.

According to CME Group’s FedWatch Tool, market odds of a quarter-point Federal Reserve interest rate cut on December 18 have decreased from about 80% a week ago to roughly 65% due to potentially inflationary tariffs and immigration measures.

Decision Desk HQ predicted Monday that when Trump takes office in January, his Republican Party will dominate both chambers of Congress. He could then pursue his objective of cutting taxes and reducing the size of the federal government.

With vehicles being a specific target of the incoming U.S. President, Trump has warned the euro union that it will “pay a big price” for not purchasing enough American exports. He has threatened to impose sweeping 60% tariffs on China.

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