The U.S. dollar continued its upward momentum on Tuesday, approaching a four-month peak against other major currencies. This increase is fueled by investor optimism about economic policies anticipated under Donald Trump’s upcoming administration, which is expected to promote aggressive trade practices and potentially inflation-boosting strategies. At the same time, Bitcoin reached a new all-time high of $89,637, signaling the cryptocurrency market’s own surge under the same optimistic market sentiment.
The U.S. dollar index (DXY), which compares the dollar to six other major currencies, rose by 0.16% to 105.59 early Tuesday, not far from Monday’s high of 105.70, marking its strongest position since early July. This trend reflects renewed confidence in the U.S. economy, which is expected to outperform as the Trump administration prioritizes domestic economic growth and explores measures to boost American exports. Kyle Rodda, a senior financial analyst at Capital.com, indicated that “the expectation of U.S. economic outperformance and aggressive trade practices from the Trump administration continues to push the U.S. dollar higher.”
Bitcoin, the leading cryptocurrency, reached a record high of $89,637 earlier in the day, with analysts predicting it may close the year around $100,000. Trump has advocated for making the U.S. the “crypto capital of the planet,” aligning his administration with favorable policies for digital assets, which has boosted confidence in the cryptocurrency market.
Meanwhile, the euro neared a seven-month low, while the yuan also slumped, reflecting concerns over potential Trump-led tariffs aimed at European and Chinese imports. The offshore yuan (USDCNH) hit its lowest since August, dipping to 7.2505 per dollar as China braces for possible trade policies under Trump’s leadership.
Political uncertainty within the eurozone has added to the euro’s struggles. Germany, Europe’s largest economy, faces calls for a snap election, further impacting the euro, which fell to $1.0629 overnight. Looking ahead, inflation data from Germany and other European nations could shed more light on the currency’s trajectory.
In Asia, the yen showed slight recovery, trading at 153.48 per dollar after a recent dip, as Japanese officials continue to monitor fluctuations closely. Overall, the global market is adjusting to shifting economic expectations, with potential inflationary tariffs, currency realignments, and Trump’s crypto-friendly stance shaping market movements.
