US dollar slightly weaker at the start of 2025, yen remains at five-month low

(Patria) - The US dollar weakened slightly on Thursday, the first trading day of 2025, a year in which the American currency is expected to perform well again after posting gains in 2024.

Market focus this year will be on the incoming administration of Donald Trump and its policies, which are widely expected not only to boost growth but also to increase price pressures. This will support yields on US bonds and increase demand for the dollar.

The large interest rate differential between the US and other economies cast a shadow over the foreign exchange market last year, resulting in a sharp decline of most currencies against the dollar in 2024.

No currency fell more than the yen, which dropped more than 10 percent in 2024, marking its fourth consecutive decline.

However, the yen managed to strengthen slightly on Thursday, with the dollar falling 0.25 percent to 156.6 yen. The dollar reached a five-month high above 158 yen in late December.

The euro briefly rose in value on Tuesday, but the rally quickly stalled. By the end of the day, its value was unchanged from the previous day, standing at 1.0351 US dollars. This represents a decline from the end of September, when the euro was above 1.12 US dollars.