The Bloomberg Dollar Spot Index has advanced 0.9% this week, putting it on course for its largest gain since October. Persistent inflation concerns and recent U.S. economic data have complicated the outlook for monetary easing this year, supporting the greenback, News.Az reports, citing Bloomberg.
A continued buildup of U.S. forces in the Persian Gulf has further strengthened the dollar’s appeal during a period of heightened uncertainty.
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The Japanese yen has fallen 1.8% this week, trading near 155.50 per dollar, while the euro has declined 1% to around $1.1750.
Options markets reflect a shift in sentiment, with short-term positioning turning the most bullish on the dollar since November.
In recent months, the dollar had faced pressure as other major central banks held rates steady or signaled possible hikes, while the Federal Reserve was widely expected to continue cutting rates. That view gained traction after U.S. President Donald Trump nominated Kevin Warsh to serve as the next Fed chair.
At the same time, uncertainty surrounding U.S. trade policy weighed on the currency, contributing to its steepest annual decline in eight years in 2025.
