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Dollar Continues To Grow Strong As The US Yields Continue To Rise

November 22, 2016
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The surprise results of the US Presidential election has contributed to the strengthening of the US dollar. The currency continues to ride high as the US yields also increase at a steady pace. The dollar is coming close to its 13 ½ year highs against the currency basket. The investors bet that the new US administration headed by Donald Trump will expand fiscal policies and increase the interest rates.

The dollar index tracks the US dollar against a basket of six rivaling international currencies. The US dollar index went up by 0.1% becoming 101.31. Compared to last week, the index value increased by 4%. Since March 2015, this is the highest value reached by the US dollar index. On Friday, the index value reached 101.48 which is the highest value since April 2003.

The US dollar also increases steadily against the Japanese Yen. It reached 111.190 against Yen which is the highest value in five months. Ahead of the US Thanksgiving holidays, the dollar went up 0.2% against Yen as investors started showing more interest.

The major driver for the US currency is the expectation of the industry on the policies of President-elect Donald Trump. The entire industry hopes that higher inflation will result in a faster increase in interest rates. Experts predict that the USD and Yen pair can reach the range of 109.50-112 in this week.

The forex market is buzzing with activities of selling US Treasury bonds and notes and buying the dollar. This trend is expected to continue until January after which the economic policies of the Trump administration will be revealed.