The US dollar hit a one-year high on Thursday as optimism soared in the broader markets. The DXY index, which tracks the performance of the US dollar, shows that the currency has reached a new yearly high of 106.78. However, the USD cooled down a bit and is currently trading at 106.69 points in the charts. It surged by 0.21 points in the day’s trade with a rise of 0.19% in value.
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The dramatic rise comes after Trump won the presidency against his Democratic rival, Kamala Harris, early this month. The US dollar had fallen to a low of 100.55 in August this year but now comfortably sits at 106.69. The strengthening of the US dollar is making local currencies fall to new lows in the forex markets.
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US Dollar Makes Local Currencies Dip
The Indian rupee has dipped to an all-time low against the US dollar at 84.41 this month. Local currencies are under pressure as the USD is flexing its muscles in the forex markets. Read here to know how low the Indian rupee could fall amid a stronger USD. The Modi government is trying to fix the rupee’s decline, but all policies are going in vain.
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“It’s still an extension of the post-election moves. The economic calendar has been relatively light although it’s picking up later in the week but for now, the market is focusing on the implications of a second Trump term, particularly policies that would be positive for the US dollar such as potential higher tariffs,” said Vassili Serebriakov, an FX Strategist at UBS in New York to Reuters.
“There’s been a broad move in the US dollar that started before the election and it probably got an added boost because it looks like we’re moving to a red sweep scenario, which is broadly seen as positive for the dollar,” Serebriakov summed it up.