The U.S. dollar gained back some ground after a three-day slide, reaching a one-week high. The recovery followed a period of uncertainty driven by Russia-Ukraine tensions and speculation surrounding President-elect Donald Trump’s economic policies. Investors are now looking for further signals on how Trump’s administration might impact fiscal spending, tariffs, and immigration, which could influence inflation and the Federal Reserve’s actions.
In contrast, the Japanese yen weakened, retreating from the previous day’s gains and hitting a three-month low against the dollar. The yen’s decline has prompted speculation about a potential hawkish shift by the Bank of Japan, especially as the currency nears levels that could trigger intervention. However, analysts suggest that intervention may be postponed if verbal actions prove effective in stabilizing the yen.
Despite mixed U.S. stock performance, with tech stocks showing a boost, market sentiment remains cautious. The dollar index, which tracks the greenback against six major currencies, increased by 0.3%, recovering from recent losses. Economists suggest that the market may consolidate until Trump officially takes office in January and more details on his policies emerge.
