Dollar's Unyielding Strength Poised for 2024 Gains

The dollar saw a slight dip on the year's last trading day but is set for significant gains in 2024. This is driven by fewer U.S. rate cuts anticipated under the Trump administration. Rising Treasury yields have impacted other currencies, including the yen and euro, with the dollar index rising 6.6% this year.

On the final trading day of the year, the dollar experienced a slight decline, yet it is positioned for notable gains in 2024. This expectation stems from predictions of reduced U.S. interest rate cuts under the incoming Trump administration. The dollar's ascent continues to be bolstered by increasing Treasury yields.

Despite a recent fall against the yen, the U.S. currency has strengthened significantly, with the yen facing its fourth consecutive year of depreciation. Trading volumes remain thin as Japanese markets are shut for the week and others close for the holiday. The dollar index, while declining slightly, has escalated by 6.6% in 2024.

The Federal Reserve's unexpected interest-rate forecast adjustment for 2025 further fuels the dollar's strength. In contrast, the euro is expected to drop by 5.6% against the dollar this year. Market concerns persist over the interest rate disparity between the U.S. and other economies, influencing currencies globally.

(With inputs from agencies.)