Dollar rises to two-year high as currency markets react to proposed U.S. tariffs

LONDON, Nov 26 (Reuters) - Currency markets are reacting to proposed U.S. tariff hikes by pushing the dollar to two-year highs against major trading partners. This rise could undermine the competitiveness that the tariffs aim to protect. The euro has dropped nearly 7% in two months, while the Chinese yuan has weakened by 4%. These shifts may help foreign exporters maintain market share despite potential U.S. tariffs. Analysts suggest that the Federal Reserve may not lower interest rates significantly, while other central banks could ease policies. This could widen the interest rate gap, further supporting the dollar's strength.