The U.S dollar gained stability after breaking past more of last year’s peaks against the euro on Thursday, November 24 with only the March 2015 high of $1.0457 standing in the way of a push towards parity that banks are again saying is on the cards.
The dollar hit an eight-month high against the yen and an almost 14-year high against a basket of currencies that measures its broader strength, Reuters reports.
It also inched up new record highs overnight against a raft of emerging market currencies including the rupee, the lira and China’s offshore yuan.
With U.S. markets out for the Thanksgiving holiday, trade was already thinning out after the dollar set a series of new landmarks in early trade in Europe, extending its surge after another strong batch of U.S. economic data on Wednesday.
“It is tempting to take profit given the U.S. will be absent later, but there is no change in the fundamental view on the dollar,” said Valentin Marinov, head of G10 strategy at Credit Agricole in London.
“It does feel like clients are steadily becoming more confident in the dollar rally. They have focused on the positives from the U.S. election and the data we have seen suggests there is more room for U.S. yields to rise.”
The dollar’s surge is based largely on a belief that Donald Trump’s presidency will witness a bump in inflation that will drive U.S. interest rates higher and potentially see substantial dollar capital brought home by U.S. corporates.
