The U.S. dollar weakened slightly on Thursday, the first day of trading in 2025, a year in which the U.S. currency is expected to rebound after posting gains in 2024.
The market’s focus this year will be on the incoming administration of Donald Trump and its policies, which are widely expected to not only boost growth, but also add pressure on prices. This will support US bond yields and increase demand for the dollar.
The wide interest rate differential between the US and other economies has cast a shadow over the foreign exchange market over the past year, resulting in most currencies falling sharply against the dollar in 2024.
No currency fell more than the yen, which fell more than 10 percent in 2024, marking its fourth straight decline, Fena reports.
However, the yen managed to rally slightly on Thursday, with the dollar falling 0.25 percent to 156.6 yen. The dollar hit a five-month high above 158 yen in late December.
The euro briefly rose in value on Tuesday, but that growth quickly stopped. At the end of the day, its value was unchanged from the previous day and amounted to 1.0351 US dollars. This represents a decline compared to the end of September, when the euro was above 1.12 US dollars.
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