The U.S. dollar returned to a one-year high against its major peers on Thursday, a fourth straight session of gains resulting from momentum sparked by Donald Trump's election victory eclipsing a rise in bets on Reserve easing federal.
The cryptocurrency bitcoin also hit a new record high of $93,480 overnight, and was nearing that level early in the day in Asia. Mr. Trump has pledged to make the United States “the cryptocurrency capital of the world.”
Raising tariffs and tightening immigration under the new Trump administration are expected to fuel inflation, which could slow the Fed's rate-cutting cycle longer term. The prospect of a larger deficit is pushing Treasury yields higher, providing further support to the dollar.
The president-elect's Republican Party will control both houses of Congress when he takes office in January, Edison Research predicted Wednesday, giving him considerable power to advance his agenda.
“The dollar is a magic currency supported by carry, momentum, growth differentials, (and) impending tax and tariff kicks,” said Chris Weston, head of research at Pepperstone.
“While trends are not forever, until the US economy begins to collapse, it is likely that an increasingly rich USD position will prove to be the primary factor that could cause a negotiable withdrawal.”
The U.S. dollar index, which measures the currency against six major counterparties including the euro and yen, added 0.1 percent to 106.55 at 0120 GMT, after first touching 106.56 times since November last year.
The dollar dipped briefly on Wednesday after a measure of U.S. consumer inflation met economists' forecasts, keeping the Fed on track to cut rates at their next meeting in December. But the currency quickly recovered and reached new session highs.
Long-term Treasury yields also rose on Wednesday, and extended that rise into the Asian morning, reaching 4.483% for the first time since July 1.
The dollar reached a new high since July 24 at 155.90 yen.
The euro edged lower to $1.05595, barely higher than the previous session's one-year low of $1.055575.
Sterling lost 0.1% to $1.2698, after falling to $1.2687 on Wednesday for the first time in more than three months.
Bitcoin rose about 2% to $90,395, heading toward Wednesday's all-time high of $93,480.
Elsewhere, the Australian dollar hovered near the previous session's three-month nadir after slightly weaker jobs data failed to move the needle on Reserve Bank policy expectations. Australia.
The Australian dollar was steady at $0.64865, remaining close to Thursday's low of $0.64805.
“After a long period of Australian employment growth exceeding expectations, today's weaker employment growth offers some modest indications of slowing within an exceptionally resilient labor market,” Tony said Sycamore, analyst at IG.
“This gives the central bank the space to continue to focus on inflation and keep rates in restrictive territory until the end of the year, all without any significant signs of deterioration in the labor market .”
