Dollar39;s rise could hurt U.S. companies and emerging markets
Interest rate trajectory crucial for dollar39;s future
Tariffs may harm U.S. economy, reducing dollar strength

NEW YORK, Nov 7 Reuters Donald Trumps imminent return to the White House is putting a spotlight on the U.S. dollar, which could have farreaching implications for everything from domestic manufacturers to emerging markets if the currency39;s rally continues.

The U.S. currency notched its biggest oneday gain against its peers in eight years on Wednesday, one day after Trump was reelected president and Republicans won control of the Senate while making gains in the House of Representatives. The dollar is up 3.8 this year and stands at its highest level in four months.

How much further the dollar climbs could hinge on whether investors believe Trump will enact the tax cuts and tariffs that are key elements of his economic platform. While those policies could boost growth, they risk ramping up inflation and could keep U.S. interest rates far above those of other countries. Higher rates raise the dollars allure to investors.

At the same time, a strong dollar could hurt U.S. companies one reason why the presidentelect periodically railed against a rising dollar during his first term.

A Trump administration likely means more spending, a hotter economy and high bars for international trade all things that spell strength for the dollar, said Helen Given, associate director of trading at Monex USA….