Dollar's Dominance: Weekly Surge Amid Interest Rate Speculations

The U.S. dollar experiences its largest weekly gain in over a month as market expectations shift, fueled by Trump's potential inflation-stoking policies. The Federal Reserve signals no rush to cut interest rates while the dollar strengthens against the yen and euro. Meanwhile, retail sales surpass expectations.

The U.S. dollar marked its most significant weekly gain in over a month as markets reevaluated future interest rate cut expectations. President-elect Donald Trump's inflation-stoking economic policies, including tariffs and tax cuts, have strengthened the dollar, with Federal Reserve officials suggesting caution in reducing rates.

Fed Chairman Jerome Powell's recent comments quelling aggressive rate cut forecasts saw traders adjust their positions. The greenback also gained against the Japanese yen, hitting a milestone above 156 yen, though it settled at 154.94 per dollar. Meanwhile, the euro continued its decline, reflecting persistent market volatility.

In other financial developments, the U.S. retail sales report exceeded expectations, though consumer spending momentum slowed. The probability of a December rate cut diminished significantly, impacting global currency dynamics. The dollar traded near a one-year high against a currency basket, while cryptocurrencies like bitcoin saw profit-taking after recent surges.

(With inputs from agencies.)