By Chibuike Oguh and Alun John
NEW YORK (Reuters) - The U.S. dollar strengthened against major peers on Thursday, trading at a one-year high and headed for a fifth straight session of gains, propelled by market expectations since Donald Trump clinched a dramatic return to the White House.
Markets anticipate that the incoming Trump administration will impose trade tariffs and tighten immigration as well as deepen the deficit, measures deemed to be inflationary.
The president-elect's Republican Party will control both houses of Congress when he takes office in January, Edison Research projected on Wednesday, giving him wide powers to push his agenda.
The greenback climbed above 156 yen for the first time since July and was last up 0.56% to 156.38 per dollar. The euro slumped to its weakest since November 2023 and was down 0.45% at $1.05165 in choppy trading. Sterling hit its lowest on the dollar in four months and was last down 0.44% to $1.2651.
Following his election, the market has been looking at Trump's appointment and seeing that he is not going to compromise on his campaign goals, whether it's tariffs or China, said Steven Englander, head of G10 FX strategy at Standard Chartered (OTC:SCBFF) in New York. "The market is assuming that he's going to go ahead and implement all the things that he's promised to do," he said.
U.S. producer prices picked up in October, the Labor Department reported on Thursday, a day after data showed that consumer inflation had barely budged last month. The number of Americans filing new applications for unemployment benefits fell last week, suggesting labor market strength, according to the Labor Department.
The data did not change views that the Federal Reserve would deliver a third interest rate cut next month.
Fed chair Jerome Powell said on Thursday there was no need to rush rate cuts given the strong U.S. economy. His speech echoed earlier comments on Thursday by Federal Reserve governor Adriana Kugler and Richmond Fed President Thomas Barkin.
The U.S. dollar index, which measures the currency against six top counterparts including the euro and the yen, rose 0.17% to 106.64, after reaching as high as 107.07, its highest since early November 2023. The yield on benchmark U.S. 10-year notes fell 3.7 basis points to 4.414%.
Bitcoin pulled back from a record high of $93,480 overnight and was last up 0.96% to $89,489. Trump has vowed to make the United States "the crypto capital of the planet." Ethereum declined 0.27% to $3,144.
The Swiss franc remained under pressure against the dollar, which was up 0.3% to 0.889 franc. The Australian dollar fell to a three-month low after marginally weaker jobs data, weakening to as low as $0.6453.
"The price action that we've had is expected given the election outcome and the logic behind it is built on expectations rather than actualities: expectations of fiscal stimulus, tariffs and deregulation," said Daragh Maher, head of FX strategy, Americas, at HSBC in New York.
"We've been in the dollar-bullish camp, so this seats neatly with our narrative, but clearly there's been a big repricing."