Strong dollar performance supported by U.S. economy and Trump tariff threat

The dollar had its best annual performance in nine years this year, helped by a strong U.S. economy and the Trump administration's threat of tariffs. Barclays foreign exchange strategist Skylar Montgomery Koning said that the dollar's strong performance was mainly due to the strong support of the U.S. economy.

The backbone of a strong dollar

The dollar's main pillar this year has been the strong U.S. economy. This strength means the Federal Reserve is entering a shallow rate-cutting cycle, keeping U.S. interest rates higher.

Trump administration’s tariff threats

In addition, the Trump administration's threat of tariffs also supported the dollar's performance. Trump has been emphasizing protecting U.S. trade interests, which has made investors more optimistic about the dollar.

Outlook for the US Dollar

Going forward, the U.S. dollar is expected to remain strong. As the U.S. economy continues to grow and the Trump administration takes proactive measures on trade policy, the U.S. dollar is expected to continue to maintain a solid performance.

global economic impact

However, global economic uncertainty may still have some impact on the dollar. Investors need to pay close attention to changes in the global economic environment and policy adjustments by central banks to evaluate the future trend of the US dollar.