Dollar Index Hits 25-Month High
The dollar index dipped to around 108.3 on Thursday, starting the year on a subdued note following a strong performance in 2024. Last year, the greenback gained about 7% against a basket of major currencies, as the Federal Reserve signaled a more cautious stance on interest rate cuts amid ongoing inflationary pressures.
The dollar also received a boost from Trump’s impending return to the White House, with his proposed policies—such as deregulation, tax cuts, higher tariffs and tighter immigration measures—viewed as pro-growth and inflationary. Additionally, concerns over slower growth in other major economies and persistent geopolitical risks contributed to safe-haven flows into the dollar. Looking ahead, traders are closely watching Thursday’s weekly jobless claims data for further insight into the health of the labor market.
Source: Trading Economics