Dollar Enters New Year on Strong Footing

This trading week was relatively calm due to the holiday season as fewer traders were participating in the market and volume was light. Yet this did not prevent the dollar from reaching new highs against its major peers.

The greenback was gaining on its counterparts for the most part of the week. While there were moments when it looked like the dollar may lose its upward momentum, the US currency ended the week on a strong note with the help of big gains on Friday.

Dollar bulls look into the future with hope and confidence. Most experts believe that the Federal Reserve will start raising interest rates this year. Such outlook should provide support for the dollar both in the short and the long term.

EUR/USD dropped from 1.2180 to 1.2003 (1.4 percent) over the week, reaching the lowest weekly close since May 2010. GBP/USD slid from 1.5559 to 1.5334 (also 1.4 percent) — the lowest weekly settlement since July 2013. USD/JPY closed at 120.47 after it opened at 120.35 and fell to 118.86 during the week.

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