Dollar Surges Amid Fed's Hawkish Outlook, Currencies Tumble

The dollar reached a two-year high after the Federal Reserve signaled a slower pace of rate cuts in 2025. This hawkish stance triggered a surge in the dollar against various currencies, with the Swiss franc, Canadian dollar, and the won dropping significantly. The focus now shifts to the Bank of Japan.

The U.S. dollar soared to its highest level in two years following signals from the Federal Reserve of a more cautious approach to rate cuts in 2025. This move has resulted in a significant rally for the dollar, pushing down currencies such as the Swiss franc, the Canadian dollar, and the won.

Federal Reserve Chair Jerome Powell's hawkish tone has caused traders to adjust their expectations concerning rate cuts next year. As a result, the dollar's strength is evident, with the Swissie, Canadian dollar, and won sliding to their lowest points in months or years.

With the Fed's final policy meeting of the year concluded, attention now shifts to the Bank of Japan and the Bank of England, both set to announce their decisions. The yen has seen a notable drop in anticipation, with a broader impact on the currency markets.

(With inputs from agencies.)