U.S. Dollar Hits Two-Month High as Oil, Treasury Yields Surge 
Canadian Dollar Faces Pressure as Fed-BoC Policy Gap Widens 
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US Comfortable With Canada Trade Standoff as Import Bans Loom 
Wall Street Ends Flat as Oil, Treasury Yields and Fed Jitters Rattle Markets 
Asian Currencies Mixed as Dollar Holds Near Two-Month High 
Fed Unveils Stablecoin Rules Under GENIUS Act 
Asian Stocks Fall as Surging Bond Yields Rattle Markets 
Soybean Futures Slip as Traders Await Trump-Xi Trade Signals 
RBI Uses $10 Billion Currency Swaps to Drain Excess Rupee Liquidity 
Oil Prices Jump 3% as Houthi Attack Revives Supply Fears 
Oil Prices Fall on U.S.-Iran Hormuz Deal Hopes 
Fed Unveils Stablecoin Rules Under GENIUS Act 
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The U.S. dollar traded steadily on Tuesday as investors awaited the Federal Reserve’s release of its December meeting minutes, which are widely expected to reveal internal divisions over the future path of monetary policy. Currency markets remained calm amid thin holiday liquidity, following a challenging year for the greenback that lifted major rivals such as the euro and the British pound to multi-year highs.
The euro was last seen around $1.1772, putting it on track for an annual gain of nearly 14%, its strongest performance since 2017. Sterling also remained firm near $1.3509, heading for an approximate 8% rise in 2025. These moves reflect sustained pressure on the U.S. dollar, driven by expectations of Federal Reserve rate cuts, narrowing interest rate differentials, and concerns about U.S. fiscal deficits and political uncertainty.
The dollar index, which measures the currency against a basket of major peers, hovered near 98.03, close to a three-month low. It is set to record a yearly decline of about 9.6%, marking its steepest drop in eight years. Market participants are increasingly focused on the Fed’s outlook after the central bank cut rates earlier this month but signaled it may pause further easing in the near term. For next year, policymakers appear split, adding uncertainty to the dollar’s trajectory.
Traders are currently pricing in two additional rate cuts in 2026, suggesting further downside potential for the U.S. currency. Analysts at MUFG forecast the dollar index could fall another 5% next year, emphasizing that U.S. economic performance and monetary policy will remain the key drivers.
In Asia, the Japanese yen traded near 156.07 per dollar, moving away from levels that previously triggered verbal intervention warnings from Japanese officials. Despite two rate hikes by the Bank of Japan this year, the yen has remained broadly flat, reflecting investor frustration with the slow pace of tightening. Elsewhere, the Australian dollar hovered around $0.6693, near a 14-month high, while the New Zealand dollar rose to $0.5806, ending a four-year losing streak.
