Dollar Stays Near 2-Year Highs
The dollar index remained above 107 on Friday, holding near its highest levels in two years as investors assessed the Federal Reserve's monetary policy outlook.
Data released on Thursday showed that US weekly initial jobless claims unexpectedly fell to a seven-month low, providing further evidence of a strong labor market.
Investors are awaiting business activity data later today and inflation figures next week for additional economic insights.
Currently, markets are pricing in about a 60% chance that the Fed will implement a 25-basis-point rate cut in December, with some traders betting on a temporary pause.
The dollar has also been supported by expectations that US president-elect Donald Trump’s policies—particularly on tariffs, immigration, and taxes—could reignite inflation and limit the Fed's ability to lower borrowing costs. Meanwhile, the euro and yuan have taken a hit as Europe and China face the potential impact of Trump's tariffs.
Source: Trading Economics
