Why did the US dollar rise to a record level? Does the height continue?

The US dollar rose to a record level against the main currencies, while the Canadian dollar was weak and the Mexican bizo rose slightly after the White House confirmed that President Donald Trump would impose customs duties on the two countries, according to Yahoo Finance.

Imposing fees but …

About this, informed sources revealed that Trump imposes customs duties on Canadian and Mexican imports, but will postpone the collection of fees until the first of March and will provide some exemptions for some imports.
However, White House spokeswoman Caroline Levat denied the report and described it as “false”, adding that customs duties will be implemented and entered into immediately.
Also read: Why did the dollar remain near the highest level in two years? What are its expectations in 2025?

Personal consumption expenses index

On the other hand, the US Department of Commerce data showed that the personal consumption expenses index increased by 0.3% last month in December in the largest increase since last April 2024 amid an increase in consumer spending, indicating that the Federal Reserve may not be in a hurry to resume a reduction Upper Egypt.

The reason for the strength of the dollar

“The customs and management duties lead this step towards the strength of the dollar, as the dollar trade is one of the most concentrated operations at this stage as it needs a catalyst to continue moving upwards however Threats and/or procedures for imposing customs duties are what moves the market now. “
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The US dollar rose 0.12% against the Canadian dollar, recovering from a slight decrease to trading near its highest levels in five years at 1.451 Canadian dollars and made weekly gains by about 1.1%.
The Mexican Bezo has increased by 0.17% to 20.728 pizo for the dollar, recording its worst weekly performance since October.
The dollar rose 0.54% to 155.13 yen against the dollar, achieving gains over three consecutive weeks.
He achieved gains against the Swiss franc, as the dollar rose 0.1% to 0.9016 points, achieving weekly gains by 0.5%, extensively two consecutive weeks of losses.
The euro fell 0.3% to $ 1.0367, recording a weekly decrease of 1% in the largest loss since December 30.
Over the past month, it increased by 0.23% and is the largest gain since September last year.

Central banks

Caso Oida, Governor of the Japanese Central Bank, said he should maintain a lenient monetary policy to ensure the gradual acceleration of the basic inflation towards its 2%goal.
The data issued on Friday showed that the basic inflation in Tokyo reached 2.5%, which is the fastest annual average in about a year.
The European Central Bank reduced interest rates on Thursday and the policymakers left the door open to another reduction in March, as concerns about weak economic growth overcame concerns about continuous inflation.
Meanwhile, the US Federal Reserve kept the interest rates stable and its president, Jerome Powell, said that there will be no impulsion to reduce interest again, although it also indicated that there is still room to facilitate the prices remain “concrete” above the neutrality.

The dollar index

The dollar index, which measures the value of the American currency against a basket of currencies, including the yen and the euro, increased by 0.31% to 108.42, achieving 0.93% gains within a week to end two consecutive weeks of losses.
“We were expecting some fluctuations due to the US Personal Consumption Expenses and other things, but it was compatible,” said John Felcy, Foreign Drainage Strategy and the total economy of “BN Way” in New York.
Market experts expect that fluctuations in the foreign exchange market will continue in several countries due to the withdrawal of foreign investments and the continuous power of the dollar.
Despite these challenges, some analysts such as Min Kyung Won from the South Korean Bank of Wueri believe that there are factors that may limit the strength of the dollar.
“Although the dollar index (Dixie) remains high, there are factors that may limit the strength of the dollar,” Men said, noting that possible economic stimulation measures from China as a variable may affect the market.