Dollar Hits Lowest Level in Week as Trump Trade Momentum Ebbs
The U.S. dollar slipped to a one-week low versus major peers on Wednesday, looking to extend a three-day decline from a one-week peak as the market catches its breath following the frantic rally in the wake of Donald Trump's election.
The previous day's boost to the dollar and other traditional safe-haven currencies like the yen proved short-lived, after Russia's foreign minister said the country will "do everything possible" to avoid the onset of nuclear war, hours after Moscow announced it would lower its threshold for a nuclear strike.
Bitcoin crept up towards the fresh all-time peak above $94,000 from overnight, carried by expectations for a friendlier regulatory environment for cryptocurrencies under Trump.
The dollar index - which measures the currency against six major peers - fell to a low of 106.07 for the first time since Wednesday of last week, though it had recovered to 106.27 as of 0603 GMT, mainly amid a weakening yen.
The index climbed to a one-year high of 107.07 on Thursday, buoyed by expectations for big fiscal spending, higher tariffs and tighter immigration under the incoming U.S. administration, measures which economists say could foster inflation and potentially slow Federal Reserve easing.
Investors are still waiting for Trump to name a Treasury Secretary, following the announcement of several other high-profile appointments, including Wall Street CEO Howard Lutnick as head of the Commerce Department.
Some of Trump's picks have provoked controversy for their relatively meagre relevant experience.
"The 'Trump Trade' that boosted the greenback is facing challenges from Trump's controversial cabinet nominations and the escalation in the Russian-Ukraine war," DBS strategists wrote in a client note.
Source: Investing.com
