Dollar dominates on cautious Fed, Trump trade
The U.S. dollar hit a two-year high and was on track to post an annual gain against almost all major currencies on Tuesday as the prospect that the Federal Reserve will hold interest rates higher than peers led the U.S. currency to dominate rivals. Traders have adjusted for the U.S. central bank to take a slow and cautious approach to further rate cuts next year as inflation remains above the Fed’s 2% annual target. Analysts also expect policies to be introduced by president-elect Donald Trump, including business deregulation, tax cuts, tariffs and a clampdown on illegal immigration, to boost growth and add to price pressures next year.