Euro scales near 7-month low vs dollar as tariff concerns weigh: Report

The Euro dropped to its lowest level in nearly seven months against the US dollar on November 11, weighed down by investor worries about possible tariffs by a new White House administration which could hurt the Euro area's economy, according to a detailed report by Reuters.

The Euro has edged lower since Donald Trump won the US presidential election last week, sparking concerns about possible tariffs by his incoming administration, the Reuters report explained further.

Several media outlets reported on November 8, that Trump was lining up Robert Lighthizer, seen as a hawk on trade, to return to his previous post of running trade policy, which further weighed on the currency. Sources familiar with the matter said Trump has not asked Lighthizer to return to the agency overseeing trade policy.

"What's going on today is just an extension or continuation of what's been going on since the election," said Eugene Epstein, head of trading and structured products, North America, at Moneycorp in New Jersey.

"Every country or multi-country union that is facing any potential threat in tariffs is having a hard time against the dollar." The EU's single currency was down 0.61 per cent at $1.0654. It had dropped as low as 1.0629, the lowest level since mid-April this year.

Dollar index has touched its highest level since July

Whereas, the US dollar index, a measure of the dollar's value relative to a basket of foreign currencies - slightly overshot the highs seen right after the US presidential election, with markets still waiting for clarity about future US policy.

The dollar index was 0.48 per cent firmer at 105.51, after hitting 105.70, its highest level since July. Last week, it jumped more than 1.5 per cent to 105.44, after US election results showed Trump's victory.

"It does feel like the markets are pricing in a red wave more and more," said Bipan Rai, managing director at BMO Global Asset Management, referring to Trump's Republican Party. "I think the dollar is the beneficiary of that."

Measures expected to be taken by the US president-elect - including tariffs and tax cuts - should put upward pressure on inflation and bond yields while limiting the Fed's scope to ease policy and supporting the greenback.

Tariffs are going to be the top agenda of Trump

"One of the key questions after the election is, 'What's going to be at the top of the legislative agenda for the Trump administration?'" Rai said. "And it feels more and more like it's going to be tariffs, which, of course, he can pretty much push through without needing Congress on his side to help him do that."

The dollar gained 0.69 per cent on the yen to 153.69, having been dragged off last week's top of 154.70 by the risk of Japanese intervention. Further, on November 6, it hit 154.68, its highest level since July.

Bitcoin has scaled a new record high

Bitcoin soared to a record high above $87,000 on November 11, on expectations that crypto-currencies will boom in a favourable regulatory environment following the election of Trump as president and crypto candidates to Congress.

Bitcoin gained 13.95 per cent to $87,215.00. Ethereum rose 14.27 per cent to $3,363.80. The market participants and global investors will closely follow these developments in the dollar index and the movement in crypto-currencies as it will help them in taking informed investment decisions.