The US dollar returns to strength thanks to lower expectations of early interest cuts: The US dollar returned to a strong recovery at the beginning of the new year, as the dollar index,
which evaluates the US currency against a basket of major currencies, rose to its highest level in five weeks.

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This rise came after declining expectations regarding the US Federal Reserve starting to cut interest rates in March,
which pushed the dollar to engage in a period of decline at the end of last year.

While investors were expecting the dollar to continue to decline,
recent economic data was stronger than the Federal Reserve’s expectations,
as labour market data came in strong, and unemployment rates remained at 3.7%.
Inflation rates also witnessed a new rise, as the latest reading recorded 3.4% on an annual basis,
exceeding expectations that indicated stability at 3.1%.

Members of the Federal Reserve, who are characterized by their hawkish orientation,
expressed their opinion that the rate cut may be delayed until the end of the year
while leaving the door open to raise interest rates again.
This statement sparked expectations of a rise in US bond yields, causing the dollar index to jump to 103.60 points.

In another context, the International Monetary Fund (IMF)
indicated in its statements during the Economic Forum
in Davos that the United States had overcome the negative impact of the monetary tightening policy by up to 75%.
This statement may remove some fears of an economic recession in 2024.

The US dollar returns to strength thanks to lower expectations of early interest cuts

The US dollar returns to strength thanks to lower expectations of early interest cuts

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