U.S. Dollar Rises Amid Global Market Shifts

The U.S. dollar is nearing a 7% annual gain as traders anticipate strong U.S. growth and cautious Federal Reserve policies extending into 2025. Meanwhile, the yen faces consecutive yearly losses. Global markets watch for potential changes under President-elect Trump's policies, impacting currencies and equities worldwide.

The U.S. dollar is positioned for a near 7% annual gain, driven by expectations of continued robust U.S. growth, which will likely make the Federal Reserve wary of rate cuts into 2025. As of Friday, the dollar index showed a 0.08% increase at 108.16, marking a 2.2% monthly rise and potentially closing 2024 with a 6.6% uptick.

While the yen struggles with another year of losses, dropping 5.5% against the dollar this month and 11.8% for the year, the euro also remains weak. Traders expect the Bank of Japan's accommodative stance to persist, while the European Central Bank may continue rate cuts amid a slowing eurozone economy.

Economic policies proposed by President-elect Trump, including deregulation and tariff hikes, are viewed as pro-growth yet inflationary, influencing market dynamics. In the global stock market, the MSCI index was stable yet up 1.6% for the week, while U.S. Treasury yields rose amid heightened U.S. interest rate expectations.

(With inputs from agencies.)