Dollar holds firm at 2-year high on Fed outlook
The U.S. dollar hovered near a two-year high, supported by the Fed’s outlook for fewer 2025 rate cuts

Tokyo CPI inflation exceeded expectations, fueling bets on a BoJ rate hike.
Crude benchmarks rose 1.4% last week, driven by stronger-than-expected U.S. inventory drawdowns.
Gold prices remained flat at $2,622 after last week’s decline due to higher U.S. treasury yields.
In Currencies
With ongoing political turbulence, Asian currencies continued to experience mixed movements this Monday, with the South Korean won declining while the Japanese yen strengthened on rising speculation of a potential rate hike following stronger-than-expected inflation data from Tokyo.
Meanwhile, the U.S. dollar gained slightly during Asian trading hours, hovering near the two-year high it achieved last week. This strength was fueled by the Federal Reserve's recent outlook, which signaled fewer rate cuts in 2025. The projection reinforced the dollar's attractiveness, placing additional pressure on other major currencies.
Fresh data from Tokyo revealed a higher-than-expected rise in consumer price inflation for December, reflecting mounting price pressures. The report has intensified market speculation about a potential rate hike by the Bank of Japan (BoJ). A summary of opinions from the BoJ’s December meeting hinted at the possibility of policy action soon, with some officials suggesting conditions were becoming conducive to a hike.
Tokyo’s CPI rose to 2.4% vs 2.5% expected and 2.2% previous.
In Commodities
Oil prices inched higher during subdued holiday trading, as market participants awaited key economic data from China and the U.S. later this week to gauge demand prospects in the world’s largest oil-consuming nations.
Brent crude hovered near $73.86 per barrel, while WTI was trading near $70.60 per barrel.
Both benchmarks gained approximately 1.4% last week, buoyed by a sharper-than-expected decline in U.S. crude inventories for the week ending December 20. The drop was attributed to robust holiday fuel demand, underscoring strong near-term consumption trends.
Market sentiment was further supported by optimism surrounding China’s economic outlook for 2025. Authorities in Beijing have committed to issuing a record 3 trillion yuan ($411 billion) in special treasury bonds to stimulate growth, potentially boosting crude demand from the world’s largest oil importer.
Gold prices were flat near $2,622 after falling last week on higher treasury yields following the US Fed hawkish remarks.