Dollar Dominates in 2024

31 Dec 2024 , 12:03 PM

As investors braced for fewer rate cuts in the United States and the policies of the incoming Trump administration, the dollar remained strong on the final trading day of the year, setting it up for significant gains versus most other currencies in 2024.

The yen has fallen to its lowest levels since July, when Japanese officials last intervened, as a result of the dollar’s rise, which has been supported by rising Treasury yields. It was trading at 157.02 per dollar on Tuesday, putting it on track to fall 10% against the dollar in 2024—its fourth consecutive year of depreciation.

With most markets closed on Wednesday for the New Year’s Day holiday and Japanese markets closed for the remainder of the week, volumes are probably going to be thin.

The dollar index, which compares the value of the US dollar to six other major currencies, is currently at 108.06, which is not far from the two-year high it reached this month. As traders reduced their expectations for significant rate cuts in 2024, the index increased 6.6%.

Fearing persistently strong inflation, the Fed surprised investors earlier this month by reducing its 2025 interest-rate prediction from 100 basis points to 50 basis points.

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