The US dollar stopped rising on Thursday as traders waited for more clarity on the proposed policies of US President-elect Donald Trump and sought to guess the possibilities of a less severe interest rate cut by the Federal Reserve.
Meanwhile, Bitcoin’s rally has accelerated toward $100,000, continuing a strong upward march in the past few weeks on hopes that the president-elect will create a friendlier regulatory environment for cryptocurrencies.
Bitcoin hit an all-time high of $97,902 on Thursday, boosted by a report that Trump’s social media company is in talks to buy cryptocurrency trading firm Bakkt and was last up 2.54% at $96,860.
The dollar index was down 0.11% at 106.49, but held on to most of the previous session’s gains after investors raised their gauge of the dollar index against its major rivals to a one-year high of 107.07 hit last week.
This sentiment has been driven by sharp fluctuations in market prices, which currently put the odds of the Fed cutting interest rates at its December meeting at below 54%, down from 82.5% just a week ago, according to CME’s FedWatch tool.
A Reuters poll showed that most economists expect the Fed to cut interest rates at its December meeting, with smaller cuts in 2025 than expected a month ago due to the risk of higher inflation from Trump’s policies.
The dollar has risen more than 2% since the US presidential election on November 5 on bets that Trump’s policies may reignite inflation and ease future interest rate cuts by the Federal Reserve.
Meanwhile, traders are gauging what Trump’s campaign pledges to impose tariffs mean for the rest of the world, with Europe and China potentially under attack.
