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Donald Trump’s Win Resulted In High Yield For US Dollar

October 25, 2016
by Latisha Liming
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As expected, the price of the US dollar surged after the result of the election was announced. Even though the results were shocking for most people, USD reached its highest value in the past four months against the Japanese Yen on Wednesday. The prices on 30-year bonds and 10-year treasury notes fell, and this resulted in an increase in yields. Trump acted according to the expectation with protectionist trading policies that puts pressure on wages and inflation.

The increase in yields of the 30-year bonds and 10-year notes was the highest recorded rise since July 2013. There is a gripping fear of inflation rising to new heights and this has resulted in the highest yields of the 30-year bonds. The surge in the interest rates of the US has, in turn, increased the dollar value, making it more attractive for investment purposes. Experts suggest that dollar/yen will continue to increase as long as the yields continue to increase. In the forex market, the yields drive the price value.

The dollar touched a high of 105.87 yen which is the highest recorded value after July 27. Later it fell by 4% overnight as Trump focused on securing the election. The interest rates in the US have been put on hold since the December 2015. Many investors and futures experts believe that the US Federal Reserve will increase the interest rates with the new Presidency. The dollar also dominated against Swiss Franc. The dollar index, which measures greenback against the six important currencies, gained 0.7% to reach 98.545%, which is the highest recorded value since October 31st