The dollar is rising to a two-year high as investors bet that President-elect Trump’s proposed tax cuts, restricting immigration and tariffs on imports will stimulate US inflation and slow the pace of interest rate cuts by the Federal Reserve.

The dollar index, which measures the dollar’s value against a number of currencies, rose above 107 for the first time since November 2022, while the euro approached $1.05, its weakest level in 13 months.

Sterling fell below $1.2650 for the first time since July and the Japanese yen is trading above 156 against the dollar, near its weakest level in four months.

The strength of the dollar also affects precious metals; Gold is trading at around $2,545 per ounce, its lowest level since mid-September, down more than 1% on the day.

The dollar is also benefiting from its safe-haven status amid concerns that the Trump administration will weaponize sanctions and trade, according to Deutsche Bank strategist George Saravelos.