The dollar's rapid rise, following Donald Trump's November 8 election victory, shows little sign of abating, with investors betting on a positive outlook for the U.S. economy in anticipation of additional fiscal stimulus.
Since the election, the dollar index, which measures the greenback against a basket of currencies, has risen 3.6 percent. The greenback has climbed 4.28 percent against the euro and a modest 0.43 percent versus the pound in the same period.
President-elect Trump promised big tax cuts and infrastructure spending during his campaign, which analysts said had forced global investors to reassess the impact of his policy plans. "(Investors) unwound positions immediately after his victory and laid on fresh long dollar, long stock trades," said Kathy Lien, managing director of foreign exchange strategy at BK Asset Management in a note on Friday.
Elsewhere, the market is also expecting a possible interest rate hike from the Federal Reserve at its December meeting. Last week, Fed Chair Janet Yellen said that a rate hike could be "appropriate relatively soon" and added there were dangers to waiting too long to tighten monetary policy.
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