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The US dollar surged to a four-month high, pressuring major global currencies like the Euro, Pound, and Yen to multi-month lows. The Euro fell to $1.0625 due to US policy concerns and German political instability. The Pound dropped to $1.28, impacted by labor data and UK monetary policy. The offshore Yuan slid past 7.24 per dollar, weighed down by weak Chinese data. Meanwhile, the Yen remained weak, prompting Japanese authorities to issue warnings against volatile moves. The Australian dollar also depreciated, reflecting China’s economic struggles. Expectations of deregulation and trade tariffs under a Trump presidency are fueling inflation fears, limiting central banks’ room for easing, and boosting the greenback's dominance.

Key Highlights

* Euro hits $1.0625, lowest since mid-April, amid strong dollar.

* Pound slides to $1.28 as labor market pressures mount.

* Offshore Yuan falls below 7.24, dragged by weak Chinese data.

* Japanese Yen weakens as dollar strength continues unchecked.

* Aussie dollar pressured by China’s slowdown and strong greenback.

The US dollar rallied above 105.6 on Tuesday, marking a four-month high as optimism surrounding Donald Trump’s policy agenda fueled market moves. This surge pressured global currencies, pushing the Euro to $1.0625, its lowest since mid-April. The Eurozone currency suffered additional declines due to concerns over Trump’s proposed trade tariffs and political uncertainty in Germany, where Chancellor Olaf Scholz’s coalition faces calls for early elections.

The British Pound slid to a three-month low of $1.28, driven by UK labor data and a cautious stance by the Bank of England. Wage growth eased slightly, while the unemployment rate ticked up, supporting a dovish outlook for monetary policy.

The offshore Yuan weakened past 7.24 per dollar, under pressure from weak Chinese economic data and a lackluster stimulus package. China's October inflation and lending data fell short of expectations, further weighing on the currency.

Similarly, the Japanese Yen remained subdued at 153.5 per dollar. Domestic concerns over policy divisions at the Bank of Japan compounded its weakness, even as authorities warned against excessive volatility.

The Australian dollar also declined, influenced by its close ties to China’s economic health. Weak Chinese demand and global dollar strength overshadowed improved domestic consumer confidence and business sentiment.

Across the board, expectations of deregulation and potential trade tariffs under Trump’s leadership are driving inflationary concerns, limiting central banks' ability to implement aggressive rate cuts, and keeping the dollar's rally intact.

Finally

The dollar's strength continues to dominate global currency markets, pushing major currencies to multi-month lows. Inflation and trade concerns remain key drivers of this trend.

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