The markets welcomed the victory of Donald Trump in the presidential election yesterday to become the forty-seventh president of the United States of America, The US dollar rose against most major currencies in anticipation of Trump's pro-growth and pro-US policies, pushing it to the highest level in four months, as demand for the US dollar strengthened.
The US dollar index, which is now trading near the levels of 105.00 and around, rose by 2% yesterday, as the gauge that measures the dollar's valuation against six major currencies in the foreign exchange market, reached a four-month high.
To be sure, the outlook looks bright for the dollar, and Trump has vowed to impose tariffs on trading partners, which is seen as bullish for the dollar even though this step may strain some of the United States ' international relations with major countries.
Domestically, Trump has pledged to support small and medium-sized businesses and focus his efforts on hiring US citizens and stimulating local businesses, all of which bodes well for the US dollar.
However, there are other factors that play a big role in the dollar's movements, and the most important of these factors is expected to come later on Thursday, as the Fed is preparing to report the level of interest rates and the 25 basis point rate cut has already been priced at more than 97% of expectations, and less than 3% of the 50 basis point rate cut.
The reduction is expected to continue the cycle of interest rate cuts initiated by the US central bank, which began at the previous meeting when officials cut 50 basis points.
