The value of the United States (U.S.) dollar on Tuesday hovered near its highest level in more than two years as traders increasingly doubt the likelihood of interest rate cuts in the U.S. in 2025 following positive economic data.
With newly elected President Donald Trump set to return to the White House next week, the focus has been on his policies, which analysts expect to boost growth but also increase pressure on prices.
The threat of tariffs, combined with the Federal Reserve’s announced cautious approach to cutting rates this year, has lifted yields on U.S. bonds and strengthened the dollar, putting the euro, pound, yen, and yuan under pressure.
The euro was stable at 1.02545 dollars but hovered near its more than two-year low of 1.0177 dollars, which it reached on Monday.
The currency struggled at the beginning of the year after falling by more than six percent in 2024, as investors grew concerned about weak economic growth in the region and the threat of tariffs.
