US Dollar (USD) strength persisted into the start of 2025, with the USD Index gaining over 2.5% in December. This marks the third consecutive month of gains, as the index consolidates just below the 26-month peak of 108.50 reached on December 31. Market participants now await the release of key US economic data, including Initial Jobless Claims and December’s Challenger Job Cuts figures.
US Markets Support Dollar Momentum
Wall Street’s major indexes experienced sharp declines as the new year approached, providing further support for the USD. However, Thursday’s US stock index futures indicate a potential recovery in risk sentiment, as they trade in positive territory.
Meanwhile, EUR/USD ended December below 1.0400 and continues to trade in a narrow range above 1.0350. Revised manufacturing PMI data for the Eurozone and Germany, expected later today, could influence market direction. Similarly, GBP/USD has shown stability above 1.2500 despite recent losses.
Broader Market Developments
China’s Caixin Manufacturing PMI slipped to 50.5 in December from 51.5, missing expectations of 51.7. Despite this, AUD/USD gained 0.5% in early trading, supported by improved sentiment.
Gold prices stabilized above $2,600 after recent declines, with XAU/USD trading near $2,630 at the European open. In contrast, USD/JPY retreated from its post-Christmas high of 158.00 and now trades below 157.00, down 0.3% on the day.
As the US Dollar maintains its position near multi-year highs, upcoming data releases and global market trends will likely shape its trajectory in the days ahead.
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