The 10% decline of the US dollar this year: How trade policies and interest rate cut cycles are stirring the forex market

OnChainDetective · 2025-12-29T08:41:24+00:00

Holiday trading was light, with the US dollar remaining stable against major currencies, and the US Dollar Index hovering around 98.01. Due to the lack of significant data and the New Year's Day holiday, market liquidity has decreased. In 2024, the US Dollar Index has declined by nearly 10% cumulatively, with year-end adjustment expectations becoming more apparent due to trade policies and Federal Reserve rate cuts.

OnChainDetective

2025-12-29 08:41:24

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【Crypto World】Holiday trading is quiet, and the market lacks new driving forces. The US dollar against other major currencies remains largely unchanged, with the DXY index around 98.01, continuing its recent stable trend.

However, it is worth noting that this week’s economic calendar has no major data releases, and with multiple markets closed for New Year’s Day, liquidity will further shrink. As we approach the end of the month and the year, institutions generally expect a potential adjustment in dollar positions.

Looking back at the entire 2024, the performance of the US dollar index has indeed been disappointing—down nearly 10% year-to-date. What are the main drivers behind this? One is the impact of trade policies, and the other is the Federal Reserve’s interest rate cut cycle. Especially this year, changes in the policy environment have exerted significant pressure on the dollar’s direction. As the market enters the year-end sprint phase, these factors’ continued evolution remains worth close attention.

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OnchainUndercover

· 8h ago

The US dollar has truly underperformed this year, with a 10% loss directly, and the trade policies are really harsh. The Federal Reserve cutting interest rates has kept the dollar suppressed, and that's the difference. The holiday period is quiet, everyone is waiting to rebalance their positions, and they have a sense of what's coming. Will there be a rebound at the end of the year? Or will it continue to fall? It depends on policy signals. Is the DXY at 98 a bottom, or is there still room to go down?

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CexIsBad

· 8h ago

This 10% drop in the US dollar, to put it simply, is due to policy turmoil, combining trade tactics with interest rate cuts, forcibly pushing the dollar down... There isn't much market activity during the holiday, just waiting for this wave of adjustment at the end of the year.

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YieldWhisperer

· 8h ago

DXY down 10% but honestly the math on fed pivot doesn't really add up either... liquidation cycles masked as "policy shifts" - I've tracked these patterns since 2021. Flow analysis says institutions dumping USD into year-end, classic pattern before the rebalance chaos hits.

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ProbablyNothing

· 8h ago

The US dollar has fallen 10%... Basically, it's the Federal Reserve cutting interest rates and trade policies causing disruptions. There's really nothing new about this wave.

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