Euro hits close to 7-month low vs greenback as tariff worries weigh

By Hannah Lang and Chibuike Oguh

(Reuters) -The euro dropped to its lowest stage in practically seven months in opposition to the U.S. greenback on Monday, weighed down by investor worries about doable tariffs by a brand new White Home administration which may damage the euro space’s financial system.

The euro has edged decrease since Donald Trump received the U.S. presidential election final week, sparking issues about doable tariffs by his incoming administration.

A number of media retailers reported on Friday that Trump was lining up Robert Lighthizer, seen as a hawk on commerce, to return to his earlier publish of operating commerce coverage, which additional weighed on the foreign money. Sources accustomed to the matter mentioned Trump has not requested Lighthizer to return to the company overseeing commerce coverage.

“What is going on on at this time is simply an extension or continuation of what is been occurring because the election,” mentioned Eugene Epstein, head of buying and selling and structured merchandise, North America, at Moneycorp in New Jersey.

“Each nation or multi-country union that’s dealing with any potential risk in tariffs is de facto having a tough time in opposition to the greenback.”

The EU’s single foreign money was down 0.61% at $1.0654. It had dropped as little as 1.0629, the bottom stage since mid-April this yr.

In the meantime, the U.S. greenback index – a measure of the greenback’s worth relative to a basket of foreign currency echange – barely overshot the highs seen proper after the U.S. presidential election, with markets nonetheless ready for readability about future U.S. coverage.

The greenback index was 0.48% firmer at 105.51, after hitting 105.70, its highest stage since July. Final week, it jumped greater than 1.5% to 105.44, after U.S. election outcomes confirmed Trump’s victory.

“It does really feel just like the markets are pricing in a crimson wave increasingly more,” mentioned Bipan Rai, managing director at BMO International Asset Administration, referring to Trump’s Republican Get together. “I believe the greenback is the beneficiary of that.”

Measures anticipated to be taken by the U.S. president-elect – together with tariffs and tax cuts – ought to put upward strain on inflation and bond yields whereas limiting the Fed’s scope to ease coverage and supporting the dollar.

“One of many key questions after the election is, ‘What is going on to be on the prime of the legislative agenda for the Trump administration?'” Rai mentioned. “And it feels increasingly more like it is going to be tariffs, which, after all, he can just about push by way of with no need Congress on his facet to assist him try this.”

The greenback gained 0.69% on the yen to 153.69, having been dragged off final week’s prime of 154.70 by the chance of Japanese intervention. On Nov. 6, it hit 154.68, its highest stage since July.

A abstract of opinions from the Financial institution of Japan’s October coverage assembly confirmed members have been uncertain on when to lift charges, additionally as a consequence of political uncertainty.

Bitcoin soared to a file excessive above $87,000 on Monday on expectations that cryptocurrencies will growth in a beneficial regulatory atmosphere following the election of Trump as president and crypto candidates to Congress.

Bitcoin gained 13.95% to $87,215.00. Ethereum rose 14.27% to $3,363.80.

The U.S. bond market is closed for a public vacation on Monday, although shares and futures are open.