The strength of the US dollar was the story of the year in the foreign exchange market once again in 2024 and it ends strongly today.
The dollar fell in late 2023 as the market saw interest rate cuts, but they only started in late 2024 and now some analysts think they’re done, with the Fed funding futures prices for just 44 bps in easing.
Changes in rate expectations have led to choppy trading for most of the year, but the dollar index is expected to finish very close to year’s highs. It’s up 7.1% this year with particularly strong gains against the yen for the second year in a row.
Chart-wise, the monthly DXY looks good here as it breaks the range.
DXY monthly
For today, the Antipodeans are at the bottom of the pile with the AUD down 0.6% and the NZD down 0.9% after a weak finish in China.
The euro isn’t doing much better and is on track to finish just above the November lows.
EUR per month