Dollar Dominance: A Year of Growth for the Greenback

The U.S. dollar reached a two-year high at the start of 2025, bolstered by U.S. economic growth and expectations of elevated interest rates. Supported by President-elect Trump’s policies, the dollar is outperforming international currencies while interest rates and global market conditions shift.

The U.S. dollar surged to a two-year peak as 2025 trading commenced, continuing last year's upward trajectory, with expectations of robust U.S. growth and sustained high interest rates underpinning this strength. The Federal Reserve is adopting a cautious stance on interest rate cuts, given persistent inflation and a resilient economy.

Market anticipation around President-elect Donald Trump's policies further boosts potential growth, impacting global market dynamics. 'Regarding 2025 economic growth, the dollar has no competitor,' remarked Adam Button, chief currency analyst at ForexLive, emphasizing the greenback's supremacy in financial markets.

Data indicated a solid jobs market, with low layoffs in late 2024 contributing to the dollar's appeal. The dollar index rose, affecting other currencies like the euro and Sterling while global economic uncertainties and interest rate outlooks influenced international monetary flows and sentiments.

(With inputs from agencies.)