The U.S. dollar advanced to one-year high against major currencies on Wednesday powered by so-called Trump trades and after U.S. inflation for October came in as expected, suggesting the Federal Reserve will continue lowering interest rates.

The greenback hit its highest level since November 2023, buoyed by Donald Trump's victory in last week's U.S. presidential election, which sparked expectations of potentially inflationary tariffs and other measures by his incoming administration.

Trump's Republican Party will also control both houses of Congress when he takes office in January, Edison Research projected on Wednesday, enabling him to push an agenda of cutting taxes and shrinking the federal government.

The dollar index , which measures the greenback against a basket of currencies including the yen and the euro, rose 0.43% to 106.44 after reaching as high as 106.53.

Labor Department data on Wednesday showed the U.S. consumer price index rose 0.2% for the fourth straight month, in line with economists' expectations, amid higher costs for shelter such as rents. In the 12 months through October, the CPI advanced 2.6%.

U.S. Treasury yields fell following the inflation data, with the 2-year note yield, which typically moves in step with interest rate expectations, dropping 6.5 basis points to 4.279%.

Japan's wholesale inflation accelerated in October at the fastest annual pace in more than a year, complicating the Bank of Japan's decision on how soon to raise interest rates.

The yen broke through 155 per dollar, the Japanese currency's weakest level since late July. It was last at 155.46 yen per dollar.

The euro continued its descent amid expectations of potential Trump tariffs. Political uncertainty in Germany, the bloc's biggest economy, has also weighed on the currency following the collapse of Chancellor Olaf Scholz's governing coalition last week and with snap elections set for Feb. 23.

The euro was down 0.51% at $1.0569. It had dropped to as low as $1.055575, its lowest level since November 2023.

The dollar was flat at 7.243 versus the offshore Chinese yuan. Against the Swiss franc, the dollar strengthened 0.43% to 0.885.

Source : Reuters