Euro collapses in US election aftermath | FX Research
The US dollar is making significant moves today, soaring higher following a surprising victory for Donald Trump.
The dollar has reached its strongest level in a year, making notable gains against the euro and yen. Risk-correlated assets have sold off, but the dollar is benefiting from a positive reaction in US equities, with futures pushing to fresh record highs.
The “Trump trade”—driven by expectations of tariffs and tax cuts—is lifting both the dollar and stocks. The market will likely take the rest of the day to digest what has been a surprising result for many.
Predictive market platforms are gaining more credibility today, having forecasted a clear Trump victory for several weeks.
On the data front, euro area figures came in slightly stronger than expected, but this had little impact on the euro, as concerns over Trump’s tariffs weigh on sentiment. UK PMIs were slightly softer, while earlier today, New Zealand’s employment data missed expectations.
In other markets, Bitcoin hit a fresh record high and could be on track to accelerate towards the $100,000 mark. After months of consolidation, Bitcoin’s gains have been somewhat tempered by the surge in dollar strength.
However, we suspect that as the dollar slows down—either due to technical overextension or a shift in focus toward expectations of more rate cuts from the Fed—Bitcoin and crypto assets could accelerate to the upside.
Looking ahead, we have an ECB speech from Christine Lagarde and Canada’s Ivey PMI data on the docket.
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