The dollar achieves notable gains thanks to reports on tariffs!

The dollar experienced a strong rise in trading on Wednesday, supported by key economic and political developments. Among the most notable factors were reports about the possibility of the newly elected President Donald Trump declaring a national emergency to impose new tariffs, in addition to encouraging economic data that boosted optimism regarding the strength of the US labor market.

Here are the key factors influencing the dollar's movements:

Reports of new tariffs drive the dollar upward

This morning, CNN reported, citing informed sources, that President-elect Donald Trump is considering declaring a national emergency after his inauguration on January 20. This move could allow him to impose new tariffs, which has positively impacted the dollar's movement today, as this news has enhanced investor optimism about potential economic measures that could contribute to US economic growth. This escalation in expectations has played a significant role in supporting the dollar index.

Positive unemployment claims data bolsters investors' confidence in the dollar's performance

The dollar also benefited from data released regarding US unemployment claims, which showed that claims for unemployment benefits rose by 201,000 claims last week, coming in lower than the anticipated increase of 214,000 claims. These figures reflected an improvement in the US labor market, reinforcing expectations that the Federal Reserve may continue a more measured monetary policy in the absence of strong economic pressures calling for sharp interest rate cuts.

Rising US bond yields increase the dollar's gains

Additionally, the dollar benefited from the ongoing rise in US bond yields, which boosted its appeal as a safe haven. The yield on 10-year bonds rose by 0.60% to reach 4.713%. Meanwhile, 20-year bonds experienced an increase of 0.64%, bringing the yield to 5.011%, while the yield on 30-year bonds climbed by 0.73% to 4.948%. These increases in yields on US bonds provided further support to the US currency.

Impact of these factors on the dollar index

The US dollar index rose by 0.47% to reach 109.19 points. However, investors remain in a state of anticipation as they await the US employment data scheduled to be released at the end of this week, as these data are expected to have a significant impact on the dollar's movements in the coming period.

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