By Rae Wee
SINGAPORE (Reuters) -The dollar was on track for its best weekly performance in over a month on Friday, underpinned by expectations of fewer Federal Reserve rate cuts this year and the view that the U.S. economy will continue to outperform the rest of its peers globally.
The greenback began the new year on a strong note reaching a more than two-year high of 109.54 against a basket of currencies on Thursday as it extended a stellar rally from last year.
Its charge higher has come on the back of a more hawkish Fed and a resilient U.S. economy.
“Looks like dollar strength is here to stay for now in early 2025 given the U.S. exceptionalism story is here to stay, and it still comes with high U.S. yields,” said Charu Chanana, chief investment strategist at Saxo.
“Add to that the uncertainty from policies of the incoming (Donald) Trump administration, and you also get the safety aspect of the dollar looking attractive.”
Ahead of U.S. President-elect Trump’s inauguration on Jan. 20, markets have taken his impending return to office with caution due to uncertainty over his plans for hefty import tariffs, tax cuts and immigration restrictions.
That has in turn given the greenback additional safe haven support.
The last stood at 109.17 and was on track for a weekly gain of just over 1%, its strongest since November.
The euro was meanwhile among the biggest losers against a towering dollar, having tumbled 0.86% in the previous session to a more than two-year low of $1.022475.
“As far as the euro zone’s concerned, there could be