US Dollar hits four-month high on 2024 Trump election win

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Trump victory raises expectation of policy-induced inflation, forcing Fed to keep policy restrictive for longer.

FOMC meets on Thursday with a 25 bps cut priced in.

US economy continues to grow at or above trend.

The US Dollar Index (DXY), which measures the value of the USD against a basket of six currencies, surged to a four-month high after former US President Donald Trump secured the necessary electoral votes to become the next US president. 


The US Dollar Index trades above 105.00 on Wednesday, the highest level since early July, following a steep rise against most major peers. Trump's victory has fueled expectations of his policies, including tax cuts, deficit spending and tariffs, which are anticipated to spur inflation and constrain the Federal Reserve (Fed) from implementing a more dovish monetary policy.



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