The euro and sterling hit multi-month lows against the dollar on Thursday as investors braced for Donald Trump’s return to the White House this month as a new trading year begins.
The euro fell 0.33% to $1.032 shortly before 1 pm in London, hitting its lowest level since November 2022, while sterling fell 0.78% to $1.242, an eight-month low.
Optimism surrounding the U.S. economy and stocks took center stage as markets reopened after trade disruptions over Christmas and New Year. Wall Street Stock Futures Going higher on a decline Europe and Asia Pacific and dollar index — compared to a basket of currencies — was up 0.25%.
Susannah Streeter, head of currencies and markets at Hargreaves Lansdown, said in a report on Thursday that “as consumers and businesses shake off the impact of high interest rates, Unemployment remains low and (U.S.) economic growth has continued to exceed expectations.
“Investors are hoping for a Goldilocks scenario in 2025 amid a second-term Trump presidency promising lower taxes and looser regulations.”
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“The U.S. dollar continues to draw support from bullish expectations for Trump’s policy and waning confidence in the Fed’s 2025 rate-cutting trajectory,” Mohamad Al-Saaf, associate FX and rates strategy at Danske Bank, said in a report on Thursday.
Saraf said key data to assess the robustness of the U.S. macro narrative include Thursday’s jobless claims and Friday’s ISM manufacturing report, as well as next week’s non-farm payrolls data.
He added that the euro could fall back to dollar parity in the medium term, a benchmark it last hit in November 2022. reduce.
