The strength of the US dollar was the story of the year in the forex market once again in 2024 and it’s finishing strong today.

The dollar slumped late in 2023 as the market saw rate cuts but they didn’t start until late in 2024 and now some analysts think they’re already done, while the Fed funds futures market prices in just 44 bps in easing.

The changes around rate expectations led to choppy trading in much of the year but the dollar index is looking to finish very close to the highs of the year. It’s risen 7.1% this year with particularly large gains against the yen, which is has been a dog for a second consecutive year.

As for the chart, the monthly DXY is looking good here as it breaks the range.

For today, it’s the antipodeans that are at the bottom of the pile with AUD down 0.6% and NZD down 0.9% following a weak finish for Chinese stock markets.

The euro isn’t doing much better and is on track to finish just above the November low.

This article was written by Adam Button at www.forexlive.com.

Clyde Russell at Reuters takes a look at a few scenarios for global markets in 2025 and how they will play out. It’s a good time to think through some different ideas, even if you disagree with some of the takes here. Not surprisingly, the list is dominated by the uncertainty of how Trump and Republicans will govern.

1. Trump Better Than Expected

• Trade threats yield concessions
• US economy leads global growth
• China recovers
• Peace deals reached
• Bullish: copper
• Bearish: oil, gas

2. Trump Worse Than Feared

• Major trade barriers erected
• Global economy suffers
• Higher inflation
• Bearish: copper, iron ore, oil, LNG
• Bond markets punish Treasuries

3. China Recovery

• Property/local govt cleanup succeeds
• Consumer spending rebounds
• New markets for green tech
• Bullish: copper, iron ore, LNG, coal
• Limited oil impact due to EVs

4. OPEC+ Fractures

• Unity breaks under US production surge
• UAE may increase output
• $75/bbl support threatened
• EV adoption pressures oil outlook

5. Energy Transition Ex-US

• China floods market with cheap green tech
• US isolates itself
• Global adoption accelerates
• Bullish: copper, lithium, minor metals, silver

This article was written by Adam Button at www.forexlive.com.