Dollar Soars Amid Trump's Inflationary Tariff Plans

The U.S. dollar reached a five-month high against key currencies, fuelled by expectations of inflationary tariffs under President-elect Donald Trump. This ascent comes as he promises to make the U.S. a 'crypto capital,' and as political shifts in the U.S. Congress bolster the dollar's position.

The U.S. dollar hit a near five-month peak against major currencies on Tuesday. This rise is prompted by anticipation of inflation-driven import tariffs proposed by Republican President-elect Donald Trump, while bitcoin saw a decline from its all-time high.

Bitcoin fell from a record peak of $89,982, settling at $87,449.00, down 0.66%. As Trump focuses on making the U.S. 'the crypto capital,' the dollar soared further, driven by expectations of economic policies favorable to the dollar, such as potential higher tariffs.

The rally continued as Trump's Republican Party appears poised to achieve a slim majority in both houses of Congress. This scenario sets the stage for Trump's agenda, including tax cuts and deregulation, considered beneficial for the dollar.

(With inputs from agencies.)