The U.S. dollar hit a 6-1/2-month high against major currencies on Tuesday, driven by expectations of inflationary import tariffs under President-elect Donald Trump.

The U.S. dollar index rose 0.51%, reaching 105.96, while bitcoin briefly surged to a record high of $89,982 before retreating to $89,683.

The dollar’s strength is partly attributed to anticipated higher tariffs, which may limit the Federal Reserve’s ability to cut interest rates.

The euro and Chinese yuan weakened, with the euro falling to its lowest level since November 2023.

Meanwhile, the pound dropped after disappointing UK wage and employment data, Mint has reported.

The broader market continues to focus on Trump’s policies, which are seen as favorable for the dollar.

Written by B.C. Begley