Dollar Maintains Stronghold as Global Currencies Wobble

The U.S. dollar begins 2025 strong amid interest rate differentials, with the yen and euro also under scrutiny. Market focus includes the Trump administration's anticipated economic policies. The dollar's safe-haven appeal and economic uncertainty bolster its demand, affecting global currency performances.

The U.S. dollar, after a robust performance in 2024, showed volatility at the start of 2025 trading on Thursday. With the yen hovering near a low not seen for over five months, investors are closely monitoring U.S. interest rate forecasts to remain elevated.

Attention in early 2025 is fixed on the incoming Trump administration, which is expected to stimulate growth and trigger inflationary pressures. This scenario will likely maintain U.S. Treasury yields high, thereby increasing the dollar's demand.

The yen, which depreciated over 10% last year, continues its decline, suggesting potential intervention from Japanese authorities. Meanwhile, the Euro and other global currencies remain pressured against the dollar due to geopolitical tensions and economic uncertainties.

(With inputs from agencies.)