Currencies

The U.S. dollar paused its climb on Thursday as traders awaited more clarity on U.S. President-elect Donald Trump’s proposed policies and sought to second-guess the prospects of less aggressive interest rate cuts from the Federal Reserve.

Most Asian currencies were also nursing steep losses over the past two weeks as the dollar shot up to one-year highs after Trump’s election. The Japanese yen was among the worst-hit by this trade.

The yen got some much-needed respite on Tuesday as it steadied on the stronger side of 155 per dollar thanks to a pullback in the U.S. currency, which ran into profit-taking after a stellar rally that saw it scale a one-year high.

The dollar rose against the yen on Monday after Japan’s top central banker flagged further policy tightening ahead but left open the question of timing, leaving the market no clearer on whether a move would come next month.

The dollar was headed for a sixth straight week of gains as it extended its rally on Donald Trump’s election victory from last week. Less dovish statements from the Federal Reserve and strong U.S. inflation readings added to the greenback’s strength. 

The greenback climbed above 156 yen for the first time since July. The euro slumped to its weakest since Nov. 2023 at $1.0546 and sterling hit its lowest on the dollar in three months at $1.2683.

The U.S. dollar held below a 6-1/2-month peak against major peers and bitcoin edged further off record highs on Wednesday as markets hit pause on so-called Trump trades ahead of key U.S. inflation data later in the day.

The U.S. dollar rose toward a four-month peak versus major peers on Tuesday, while bitcoin extended its record rally as investors continued to pile into trades seen as benefiting from the incoming Donald Trump administration.

A summary of opinions from the Bank of Japan’s October policy meeting showed some members were unsure on when to raise rates again given market volatility, dimming the chance of a hike in December.

Regional currencies recouped a bulk of their weekly losses after the Fed’s move, with some even turning positive for the week. The dollar, on the other hand, tumbled from four-month highs, with some traders also locking in recent gains.