The US dollar index continues to reach new heights. Several factors have contributed to the growth of the US currency, particularly the prospects of a gradual reduction in interest rates by the Federal Reserve and the strength of the US economy.

Of particular historical interest is the ongoing election. Markets appear to be factoring in a potential Trump victory, with what is being called the “Trump trade.” But what does this mean? Forex traders are betting on Donald Trump’s win in the November election and are positioning their portfolios based on his economic policies, which are seen as favorable to the US dollar. As the November 5 election date approaches, dollar volatility is expected to increase significantly.

Since the end of last month, the US dollar has risen by approximately 4%, largely due to the strong September employment report. This has contributed to a more stable outlook for lower interest rates. So, what might change under a possible Trump presidency? Analysts have highlighted Trump’s plans to impose tariffs on imports, a move that could lead to higher inflation and consequently higher interest rates.