Dollar Ends 2025 With biggest Drop in Eight Years
(bloomberg) — The dollar ended 2025 with the sharpest annual retreat in eight years, and investors say more declines are coming. This is especially true if the next Federal Reserve chief opts for deeper interest-rate cuts as anticipated.
The Bloomberg Dollar Spot Index fell about 8% this year. Traders are betting on further weakness. After tumbling following President Donald Trump’s tariff rollout in April,the greenback didn’t rebound much. Expectations are building that Trump will name a dovish successor to Fed chair Jerome Powell,whose term ends next year.
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“The biggest factor for the dollar in the first quarter will be the Fed,” said Yusuke Miyairi, a foreign-exchange strategist at Nomura. “It’s not just the meetings in January and March, but who will be the Fed chair after Jerome Powell ends his term.”