The US dollar exchange rate has significantly retreated this year, with signs of a rebound gradually emerging

According to the latest market data, the US dollar exchange rate has shown signs of stabilization after a year-long deep adjustment. The US Dollar Index (DXY) is reported at 98.01, remaining essentially flat, with a cumulative decline of nearly 10% since the beginning of the year.

Analysts point out that, in the context of a quiet holiday market, the lack of substantive driving factors has caused the dollar to temporarily consolidate. This week’s economic calendar is uneventful, with several markets closed for New Year’s Day, leading to decreased market participation and further limiting the scope for exchange rate fluctuations.

As the end of the month and year approaches, dollar positions face adjustment pressures. Market observers believe that the dollar’s continued weakness throughout the year is mainly due to two factors: first, the uncertainty brought by the Trump administration’s trade policies; second, the Federal Reserve’s interest rate cut cycle, which has reduced the dollar’s attractiveness. The combined effect of these two forces has resulted in nearly a 10% decline in the dollar exchange rate over the year.

Currently, although there is no obvious reversal in the dollar exchange rate, the possibility of a rebound is building under the influence of institutional portfolio adjustments. As the new year begins, market expectations regarding the Federal Reserve’s policy direction and the implementation of Trump’s policies will become clearer, which will be a key variable in determining the future performance of the dollar exchange rate.