The dollar is headed for its best year in almost a decade as US economic strength reins in expectations for the Federal Reserve’s rate-cutting cycle and President-elect Donald Trump’s threats of harsh tariffs underpin bullish bets on the currency.

The US dollar’s rally is gaining momentum alongside Donald Trump’s threat of sweeping tariffs, leaving currency strategists in agreement it has further to rise while war-gaming just how far it will go.

Traders are pushing the dollar toward its second-straight weekly gain in anticipation of a slower pace of interest-rate cuts by the Federal Reserve.

The dollar is about to notch its best week in two years. Geopolitical unrest, the odds of lower borrowing costs overseas and a resilient US economy are all spurring the world’s reserve currency higher.

The dollar plunged after Federal Reserve Chair Jerome Powell affirmed expectations that the central bank will cut interest rates next month, sparking a rally in the currencies of major global peers.

There’s one topic dominating the agenda as FX traders descend on Miami this week: how the currency market can adjust to a fast-approaching change to US stock settlements that stands to shake-up their industry.

The dollar kicked off the new year with its biggest daily jump since March as traders pared back bets on the scale of the Federal Reserve’s 2024 interest-rate reductions.

The dollar will surprise by getting stronger next year as the US economy outperforms, according to some of the world’s biggest money managers.

A world economy that’s still recovering from Covid-19 faces new risks from an energy-price spike as the standoff between the West and Russia escalates.