{"id":16216,"date":"2025-01-03T03:21:51","date_gmt":"2025-01-03T03:21:51","guid":{"rendered":"https:\/\/www.vtmarkets.com\/?p=16216"},"modified":"2025-01-03T03:21:51","modified_gmt":"2025-01-03T03:21:51","slug":"usd-hikes-as-u-s-economic-strength-drive-gains","status":"publish","type":"post","link":"https:\/\/www.vtmarkets.com\/en-ca\/analysis\/usd-hikes-as-u-s-economic-strength-drive-gains\/","title":{"rendered":"USD Hikes as U.S. Economic Strength Drive Gains"},"content":{"rendered":"\n<h2 class=\"wp-block-heading has-medium-font-size\">Key Points<\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>USDX closed at 108.996<\/strong>, up 0.66% for the session and 1.1% for the week.<\/li>\n\n\n\n<li>Fewer expected Fed rate cuts and U.S. economic strength fuel the dollar&#8217;s rally.<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity is-style-dots\" \/>\n\n\n\n<p>The U.S. Dollar Index (USDX) maintained its strong momentum on Friday, closing at <strong>108.996<\/strong>, just below its intraday high of <strong>109.021<\/strong>.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large is-resized\"><img decoding=\"async\" src=\"https:\/\/www.vtmarkets.com\/en-ca\/wp-content\/uploads\/sites\/13\/2026\/03\/image-2-1024x442.jpg\" alt=\"\" class=\"wp-image-16217\" style=\"width:1450px;height:auto\" \/><\/figure>\n\n\n\n<p class=\"has-text-align-center\"><em>Picture: USDX tests 109.00 resistance with traders eyeing US economic data for further direction, as seen on the <a href=\"https:\/\/vtmarketsapp.onelink.me\/CD7D\/240525WA\" title=\"\">VT Markets app.<\/a><\/em><\/p>\n\n\n\n<p>Looking at the chart, the US Dollar Index (USDX) tested resistance at <strong>109.00 <\/strong>after opening at <strong>108.281<\/strong>. The 15-minute chart shows upward-sloping moving averages, indicating sustained bullish momentum, although the MACD histogram suggests fading strength as the price consolidates near the session high of 109.021.<\/p>\n\n\n\n<p>Immediate support is visible near 108.60, while a breakout above 109.00 could open room for further gains. The index reflects cautious optimism amid positive US economic data and early-year thin trading conditions.<\/p>\n\n\n\n<p><strong>See also: <a href=\"https:\/\/www.vtmarkets.com\/analysis\/us-dollar-climbs-near-two-year-high\/\">US Dollar Climbs Near Two-Year High<\/a><\/strong><\/p>\n\n\n\n<p>The dollar is on track for its best weekly performance in over a month, buoyed by expectations of limited Federal Reserve rate cuts and the ongoing resilience of the U.S. economy.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"500\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">Treasurys post annual gain as Fed starts interest-rate cuts <a href=\"https:\/\/t.co\/w9WGa6sfaE\">https:\/\/t.co\/w9WGa6sfaE<\/a> via <a href=\"https:\/\/twitter.com\/business?ref_src=twsrc%5Etfw\">@business<\/a><\/p>&mdash; Yahoo Finance (@YahooFinance) <a href=\"https:\/\/twitter.com\/YahooFinance\/status\/1874830689608118523?ref_src=twsrc%5Etfw\">January 2, 2025<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p>The Federal Reserve&#8217;s cautious approach to rate cuts in 2025 underpinned the dollar&#8217;s strength, with markets pricing in only <strong>44 basis points of easing<\/strong> this year.<\/p>\n\n\n\n<p>This contrasts sharply with expectations of <strong>100 bps of cuts by the <\/strong><strong><a href=\"https:\/\/t.co\/ZT6a9VHZZW\">European Central Bank (ECB)<\/a><\/strong> and <strong>60 bps by the <\/strong><strong><a href=\"https:\/\/t.co\/jY20s2HR7p\">Bank of England<\/a><\/strong>, widening the rate differential in favour of the dollar.<\/p>\n\n\n\n<p>The U.S. economy\u2019s consistent outperformance relative to global peers has also supported the greenback.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">Policy Uncertainty Add Safe-Haven Demand<\/h2>\n\n\n\n<p>The dollar continues to see boosts from safe-haven flows ahead of President-elect Donald Trump&#8217;s January 20 <a href=\"https:\/\/www.bbc.co.uk\/newsround\/articles\/cz6j8n5j7w7o\">inauguration<\/a>.<\/p>\n\n\n\n<p>Markets remain cautious about potential trade tariffs, tax reforms, and immigration restrictions under the incoming administration. This policy uncertainty has enhanced the greenback&#8217;s appeal, strengthening its already enduring position.<\/p>\n\n\n\n<p><strong><a href=\"https:\/\/www.vtmarkets.com\/trade-now\/\">Create your live VT Markets account<\/a>\u00a0and\u00a0<a href=\"https:\/\/myaccount.vtmarkets.com\/login\">start trading<\/a>\u00a0now.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Dollar closes at 108.996, near two-year highs, driven by Fed rate expectations, U.S. strength, and safe-haven demand. &#8211; vtmarkets.com <\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[31],"tags":[9],"class_list":["post-16216","post","type-post","status-publish","format-standard","hentry","category-analysis","tag-dollar"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/16216","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=16216"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/16216\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=16216"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=16216"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=16216"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}