Greenback Index Sees Largest 1-Day Rally Since Brexit On Trump Victory – Invesco DB USD Index Bullish Fund ETF (ARCA:UUP), Invesco CurrencyShares Euro Foreign money Belief (ARCA:FXE)

The U.S. Greenback Index (DXY) recorded its sharpest one-day rally in over eight years on Wednesday as Donald Trump secured victory within the 2024 presidential election.

This currency-weighted gauge of the greenback – as tracked by the Invesco DB USD Index Bullish Fund ETF UUP – jumped practically 1.8% in early New York buying and selling, marking the steepest rise since June 24, 2016, when the British pound plummeted following the Brexit referendum, sparking an identical greenback spike.

International Foreign exchange Markets Face Wild Strikes As Trump Return To White Home

The greenback surged throughout the board, with notable positive aspects in opposition to the euro, Chinese language yuan and Mexican peso amid market considerations over potential U.S. commerce tariffs beneath the Trump administration.

The euro, tracked by the Invesco CurrencyShares Euro Foreign money Belief FXE, fell beneath $1.07, down over 2.1% in its worst session since March 2020.

Final week, JPMorgan had projected {that a} Republican clear sweep may weaken the euro by as a lot as 8.4%, with analysts citing a possible widening within the U.S.-EU financial coverage hole. Increased inflation within the U.S. could immediate the Federal Reserve to take care of or hike rates of interest, whereas the European Central Financial institution (ECB) may face stress to chop charges, analysts mentioned.

The Chinese language yuan additionally took successful, declining 1.2%, hitting 7.1960 — its largest drop in two years. Trump’s promise to impose tariffs as excessive as 60% on Chinese language imports fueled considerations of escalating commerce tensions.

“The 7.2000 degree is a important psychological threshold, which, if breached, may immediate intervention by Chinese language financial authorities,” highlighted Luca Cigognini, market strategist at Banca IMI.

The Mexican peso was one other main losers, slumping 2.7% to its lowest degree since August 2022.

“We anticipate that some pragmatism will prevail, with partial reversals within the medium time period,” mentioned Alejandro Cuadrado, chief market strategist at BBVA.

In the meantime, the Canadian greenback, although down 0.8% in opposition to the dollar, outperformed different main currencies.

“A Republican clear sweep bodes properly for U.S. financial development and Canadian exporters,” mentioned Francesco Pesole, overseas change analyst at ING Group, including that Canada’s foreign money stays comparatively insulated from U.S.-China tariff dynamics and geopolitical dangers beneath a Trump presidency.

Under is a snapshot of U.S. greenback actions in opposition to main currencies as of Wednesday morning:

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