Greenback Strengthens on Positive Outlook

3 Jan 2025 , 10:02 AM

Supported by the belief that the U.S. economy will continue to outperform its counterparts globally and forecasts of fewer rate cuts from the Federal Reserve this year, the dollar was headed for its best weekly performance in more than a month on Friday.

The greenback continued its incredible climb from the previous year, starting the new year on a high note and hitting a more than two-year high of 109.54 against a basket of currencies on Thursday.

A stronger U.S. economy and a more hawkish Fed have contributed to its increase.

Due to uncertainties surrounding his intentions for significant import tariffs, tax cuts, and immigration restrictions, markets have viewed U.S. President-elect Trump’s upcoming return to office with caution ahead of his inauguration on January 20.

Consequently, the greenback has received more support from safe havens.

With its most recent value of 109.18, the dollar index was headed for a weekly rise of 1.1%, the most since November.

At a more than two-year low of $1.022475, the euro fell 0.86% in the previous session, making it one of the largest losers against a rising dollar.

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