The dollar index defended its recent dominance this Tuesday, December 24 in a week marked by Christmas, As investors considered the outlook for US interest rates higher for longer, leaving other major currencies near record lows.
Following its monetary policy meeting on Wednesday, the Federal Reserve seem willing to keep rates higher for longer than markets expected, which raised prices. US Treasury bond yields and shot the greenback a 1.2% to a maximum of two years.
Trading volume is likely to reduce this week as the end of the year approaches, meaning rates They will continue to be the main driver of movements in the foreign exchange market.
The dollar index rose 0.2% to 107.99, near the two-year high of 108.54 reached on Friday.
He euro fell slightly to $1.0392near November’s two-year low, while the pound sterling was around a minimum of a month in 1.2522 dollars.
For his part, the yen was approaching a five-month low in 157.25 units per dollar, after having already fallen by nearly 5% this month, in a territory that keeps operators on alert for any intervention by the Japanese authorities.
Last week, the Bank of Japan kept interest rates stable. The central bank’s statement contrasted with the aggressive tone from the Federal Reserve a day earlier, when he projected a moderate pace of rate cuts in 2025, sending the yen tumbling.
Interest rates
Although he US inflation data Friday eased concerns about the pace of Federal Reserve cuts Next year, markets still expect an easing of just 35 basis points by 2025, which in turn supports the dollar.
Waiting for the president-elect of the United States, donald trumpgo back to the White House In January, central banks around the world urged caution about their rate plans due to uncertainty over how they might affect the economy. politics: tariffs, tax cuts and anti-immigration measures announced by the elected president.
Goldman Sachs He said it was uncertain how the tariffs could affect the Fed’s future monetary policy, adding that the inflationary impact of price increases should fade after a year.
Source: Ambito
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