The U.S. dollar is on track to achieve its best year in nearly a decade, driven by the strength of the U.S. economy and declining expectations for monetary easing.
The Bloomberg Dollar Spot Index has risen by more than 7% since the start of the year, marking its best annual gain since 2015. All major developed-market currencies have weakened against the dollar as their central banks focus on supporting their domestic economies.
However, with Wall Street betting that the dollar has more room to appreciate in 2025, global economic growth could improve later in the year, potentially boosting other currencies at the dollar’s expense.
Joe Yarak, Head of Global Markets at Cedra Markets, stated that the U.S. dollar is likely to maintain its strength in the first half of 2025, supported by several factors, including the expected 2.7% growth of the U.S. economy and the Federal Reserve's reassessment of monetary policy in the coming year.
In an interview with Al Arabiya Business, Yarak explained that other economies are grappling with economic challenges that are weighing on their local currencies, further bolstering the dollar’s strength.
