The largest in more than two years.. The dollar records its highest levels against the euro

On Thursday, the dollar recorded its highest levels in more than two years against the euro, prompted by the imminent return to the White House of Donald Trump, who intends to adopt policies that will raise the value of the American currency.
On Thursday afternoon, it increased 0.53% against the euro to 1.0301, its highest rate since late November 2022.

The value of the green currency also improved against the British pound by 1.06% to reach $1.2385 per pound, the highest level since April 2024.

Dollar price

Ras Mold, an analyst at AG Bell, told Agence France-Presse: “It is simply a continuation of the rising trend of the dollar recorded during the second half of last year, especially after the victory” in the US elections.

The dollar’s rise increased on Thursday due to the sudden decline in applications for unemployment benefits in the United States, as it recorded 211 thousand applications during the week ending December 28, the lowest level since April 2024, in a positive indicator for the Irish economy.
The US Federal Reserve no longer intends to reduce interest rates except twice this year, compared to four previously expected.

European Central Bank

Analysts are likely that the European Central Bank will reduce its rates at a more steady pace than the US Federal Reserve, given the weak economic growth in the euro zone, where the inflation rate is approaching 2%.

As for the British Central Bank, experts expect it to reduce its interest rates two or three times in 2025.

sterling

The slowdown in economic activity has a negative impact on the value of the pound sterling in Britain, where growth remained zero in the third quarter of the year and where companies fear the repercussions of the severe rise in taxes announced by the Labor government.
On the other hand, the Japanese currency advanced against the dollar, benefiting from the optimism prevailing among Japanese economists regarding a new rise in interest rates in 2025 by a decision from the Central Bank of Japan.

Interest rate

The Japan Times newspaper expected on Wednesday, based on economists’ estimates, that the central bank would raise the interest rate two or three times this year to reach 1.00% for the first time in three decades.

Last March, the Bank of Japan launched a normalization of monetary policy by raising interest rates twice in 2024. However, during the last meeting in December, Governor Kazuo Ueda mentioned a prolonged break in tightening monetary policies in light of the uncertainty prevailing at the level Economic.
However, the weakness of the Japanese yen “may increase pressure on the central bank to raise interest rates” starting in January, according to Lee Hardman, an analyst at MUFG.