As the U.S. dollar heads toward achieving its best year in nearly a decade, Michal Salibi, Chief Market Analyst at "FXPro," explained that the rise in the dollar index was driven by the performance of bond yields based on forward-looking expectations.
Gold Posts Consecutive Weekly Gains, Up 28% Annually
In an interview with "Al Arabiya Business," Salibi noted that these expectations indicate the continued strength of the dollar throughout 2025, dismissing earlier speculation about a decline in its value by mid-year.
He added that the expansion in government spending, expected to be implemented by President-elect Donald Trump, has boosted Treasury yields, which in turn has strengthened the dollar.
The Bloomberg Spot Dollar Index has climbed by more than 7% since the start of this year, marking its best annual performance since 2015.
All major developed-market currencies have depreciated against the dollar as their central banks focus on supporting their domestic economies.
However, with Wall Street betting that the dollar has more room to rise in 2025, global economic growth might improve later in the year, potentially boosting other currencies at the expense of the dollar.
