The dollar surged to a new high against the euro on Thursday, achieving its strongest position since late 2022, fueled by expectations of policies that may elevate U.S. inflation.
The American currency appreciated by 0.23% against the euro, trading at 1.0332 dollars per euro after peaking at 1.0314 dollars, its highest level since late November 2022.
Moreover, the greenback advanced by 0.51% against the British pound, reaching 1.2453 dollars per pound after hitting a peak of 1.2435 dollars, the highest since April 2024.
Analysts remarked, “This is simply a continuation of the dollar’s upward trend observed in the latter half of last year, particularly following Donald Trump’s victory.”
The U.S. Federal Reserve has now indicated only two interest rate cuts for this year, a reduction from an earlier projection of four.
Experts suggest that the European Central Bank (ECB) should lower rates more rapidly than the Fed, considering the sluggish growth in the Eurozone, where inflation hovers near the ECB’s target of 2%.
Conversely, the Bank of England (BoE) market anticipates two to three rate cuts in 2025.
In contrast, the Japanese yen remained stable against the dollar, supported by optimism among Japanese economists regarding possible interest rate hikes by the Bank of Japan (BoJ) in 2025. As of Thursday at 11:55 GMT, the yen was virtually unchanged, up by 0.01% against the dollar, trading at 157.21 yen.
