The US dollar ends the year with the largest gains in 10 years
The US dollar rose on Tuesday, capping its strongest annual advance in nearly a decade, as a strong US economy and President-elect Donald Trump’s tax and tariff cuts promised to keep interest rates high.
The gains pushed the Bloomberg Dollar Spot Index to the highest level since November 2022. It has risen about 8% this year, the highest level since 2015, after a surprisingly resilient expansion prompted traders to reduce expectations about how much… The Federal Reserve’s monetary policy policy, according to Bloomberg Network.
Analysts noted that the dollar’s rise has room to continue early next year after Fed officials signaled caution about further… of interest rate cuts, contrasting with other central banks that are expected to cut interest rates faster. This gave investors an incentive to shift cash to the United States, pushing the currency higher.
The dollar advanced against all its major counterparts in 2024, with the New Zealand dollar, Norwegian krone and Japanese yen weakening. The most against the US currency.
According to data compiled by Bloomberg, a group of market players – including hedge funds and asset managers – have increased their overall bets. The dollar rose to about $29.8 billion. This is the most bullish stance towards the US currency since April.
However, there is some doubt about how much the dollar will continue to rise, given the size of its gains and the fact that the slower pace of interest rate cuts is priced in To a large extent in the market.
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