By Carla Mozee, MarketWatch , Kosaku Narioka
Euro at lowest since January
A key dollar gauge leapt to its highest in nearly a year Monday, as investors priced in policy shifts expected to be undertaken during Donald Trump's presidency in the U.S.
The U.S. Dollar Index , which tracks the greenback's performance against six other currencies, hit an intraday high of 100.51. That was its strongest level since late November 2015, FactSet data showed. Later, the gauge moved to 99.81, up 0.6% from late Friday in New York.
The index was on its way toward a sixth-straight gain, and that would mark its longest win streak since a six-session run early May.
The "U.S. dollaris looking like a freight train rolling over anything that gets in its way," as "the world continues to obsess over Donald Trump's victory and his high-profile appointments to key positions in the White House," said Nawaz Ali, currency strategist at Western Union Business, in a note.
"Traders are moving quickly to price in prospects of higher U.S. government spending, higher inflation prospects, and consequently higher U.S. interest rates to compensate for this major shift in sentiment," he said.
Read: Trump happened: What it means for stocks, bonds, other markets (http://www.marketwatch.com/story/what-trump-victory-means-for-stocks-bonds-and-other-markets-2016-11-11)
Trump has pledged to repair aging roads, airports, ports and take on other infrastructure projects, but investors are awaiting finer details of the plan.
This week will be packed with speeches from Federal Reserve officials. If they were to "underline the 'upside risks'to the U.S. economy, then the dollar freight train could keep on rolling over its rivals and if traders can't stop the train, they'll just have to get on it," said Ali.
The Federal Reserve's next policy meeting is on Dec. 14, and expectations for an interest-rate hike have risen to more than 80%, according to the CME's Fedwatch tool (http://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html).
Euro and yen: The greenback's strength pushed the euro down to its lowest in 10 months, trading at $1.0762 compared with $1.0856 late Friday in New York.
The euro's weakness stems from "market concerns that Donald Trump's victory will trigger a wave of populism and political uncertainty throughout Europe," said Thanim Islam, senior FX dealer at FairFx, in a note.
"An Italian referendum is due in December, the French presidential elections are in May 2017 and Germany's Federal elections in autumn 2017 -- all of which could well be key for the future of the eurozone."
Against Japan's currency, the dollar was at Yen107.89 yen after hitting as high as Yen107.59, the highest level since June 7. The dollar was at Yen106.69 late Friday.
Yet, some market participants remained cautious about the longer-term outlook for the dollar given uncertainty over the combination of economic measures Trump could take.
"We'd have to see how Trump's economic team will formulate their policy," said Toshihiko Sakai, senior manager of forex and financial products trading at Mitsubishi UFJ Trust and Banking Corp.
Read:Trump names RNC head Reince Priebus as chief of staff (http://www.marketwatch.com/story/reince-priebus-said-to-be-top-contender-for-trumps-chief-of-staff-2016-11-13)
The pound , meanwhile, fell to $1.2521, backing off gains last week that pushed sterling above October levels around $1.2600. Last week's leap for the pound stemmed from brighter prospects of a trade dealbetween the U.K. and the U.S.
Meanwhile, emerging market currencies remained in focus, with many getting hit by worries that Trump's potential protectionist trade policies will hurt exports out of developing countries.
The dollar was up roughly 0.3% against Indonesia's rupiah but Malaysia's currency caught a break as the dollar declined.
Read: How Trump win pulled the beaten-down pound out of the doldrums (http://www.marketwatch.com/story/how-trump-win-pulled-the-beaten-down-pound-out-of-the-doldrums-2016-11-11)
(END) Dow Jones Newswires
November 14, 2016 07:14 ET (12:14 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.