Record performance on the foreign exchange market
The US dollar continues to assert itself on financial markets, reaching levels close to its highest in two years. The dollar index, which measures the value of the greenback against a basket of major currencies, stood at 108,05 pointsafter recently reaching a peak of 108,27 points.
This upward trend is supported by recent announcements from the Federal Reserve (Fed), marking a slowdown in rate cuts planned for 2025.
The impact on major currencies
The strength of the dollar has a strong impact on other major currencies:
- Japanese Yen : depreciation of 1,12 % has 156,56a historically low level, due to the accommodative monetary policy of the Bank of Japan (BoJ).
- Swiss franc : fall to 0,90215its lowest in five months, reflecting increased pressure on the Swiss currency.
- Canadian dollar : down to 1,44655a level not seen for four years.
- Livre sterling : stabilization relative to 1,25875signaling resilience in the face of American pressure.
- Euro : slight rebound of 0,23 % has 1,0376despite a general downward trend against the dollar.
The reasons for this rise in power
The Fed’s tough stance
The Federal Reserve took a more restrictive approach than expected, revising its rate cut forecast for 2025. Fed Chairman Jerome Powell has stressed the need to maintain firm monetary policy to contain inflation, which has strengthened investor confidence in the greenback.
The economic situation in Japan
At the same time, the Bank of Japan (BoJ) is maintaining low rates and an inflation target of 2%, further weakening the yen against a dominant dollar.
Experts’ predictions
According to Nick Reeschief analyst at Monex Europe:
- US interest rates will likely remain unchanged until at least the first half of 2025.
- The dollar could see further rise in the coming months.
- Markets will gradually adjust their forecasts, strengthening the position of the greenback.
Impacts on the global economy
This rise of the dollar could influence various economic sectors, including emerging markets, trade flows and monetary policies of major economies. As the dollar establishes itself as a safe haven, global markets will have to adapt to this new monetary dynamic.
In conclusion, the Fed’s tight monetary policy places the dollar in a strong position, with major repercussions on the overall economy, highlighting the importance of monitoring the next strategic decisions of the US central bank.
Related News :