Dollar soars as Trump assembles cabinet
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Daily Currency Update
The dollar’s post-election surge has continued over the past 24 hours as President-elect Donald Trump’s cabinet begins to take shape. A new department, the Department of Government Efficiency, has been established and will be headed by the world’s richest man, Elon Musk. There are rumours that Marco Rubio, an outspoken critic of China and current Senator for Florida, may be appointed as the new Secretary of State. This second Trump administration is expected to be filled with figures closely aligned with Trump’s ideology, and with Republicans in control of the Senate and likely to secure the House of Representatives, Trump may be well-positioned to pass legislation with few obstacles.As a result, the dollar rose further yesterday, particularly as US traders returned to their desks after the long weekend. EUR/USD is now testing 1.06, its lowest level of 2024, while GBP/USD touched 1.2720, a three-month low, before paring some of its losses.
Key Movers
All eyes are on Washington today as President Joe Biden hosts President-elect Donald Trump at the White House. There will likely be questions from the press following the meeting, with particular interest in Trump’s comments on trade and the conflicts in the Middle East and Ukraine. Trump is reportedly considering sweeping trade tariffs, which has unsettled global markets—especially Germany’s DAX index, which has fallen on concerns about the impact on its manufacturing sector.Additionally, key data to watch later today include the latest US inflation figures, with the October Consumer Price Index expected to edge up to 2.6% from 2.4% year-over-year. As usual, any deviation from the forecast could lead to dollar volatility, though the reaction may be more muted than usual given the dominant influence of political developments on the currency at the moment.
Expected Ranges
- GBP/USD: 1.2660 - 1.2815 ▼
- GBP/EUR: 1.1950 - 1.2075 ▼
- GBP/AUD: 1.9470 - 1.9615 ▼
- EUR/USD: 1.0560 - 1.0690 ▼