US Dollar Remains Strong
The dollar index held around 107.9 on Tuesday, staying at relatively close to two-year highs and remaining firm on the last trading day of the year, poised for strong gains in 2024.
The greenback is on track for a more than 6% annual surge, as traders scaled back expectations for the magnitude of Federal Reserve rate cuts next year, responding to the Fed's recent hawkish signals. Earlier this month, FOMC members lowered their 2025 interest rate forecast to a 50 basis point cut, down from 100, due to stubborn inflation and signs of resilience in the labor market.
The dollar has also been supported by expectations that President-elect Donald Trump's policies—looser regulations, tax cuts, tariff hikes, and stricter immigration—will be pro-growth, inflationary, and help keep US yields elevated.
Source: Trading Economics