The dollar index peaked at a two-year high of 108.5, supported by hawkish remarks from Fed Chair Powell, but eased as positive inflation data boosted expectations for rate cuts in 2025. Core PCE prices increased by 0.1% in November, raising hopes for disinflation.

The dollar index rose above 107, gaining 1% for its strongest week in a month, as markets priced in a 25-basis point Fed rate cut next week.

The U.S. Dollar Index ended flat, with employment and PMI data meeting expectations. Powell's dovish comments raised December's 25bps rate cut odds to 72%. The euro was volatile amid France’s government collapse and mixed PMI data, but EUR/USD closed higher on growing ECB rate cut speculation.

The Dollar Index posted its first negative close in nine weeks, driven by positive data and Trump’s appointment of Bessent, sparking a pullback.

The dollar index closed the week positively as hawkish Fed comments and rising geopolitical risks reduced expectations for a rate cut, boosting its safe-haven appeal.

The DXY rallied nearly 2% last week, marking its seventh consecutive weekly gain and testing the 107 level.

Global markets reacted strongly to recent elections, with major shifts across currencies, commodities, and fixed income, highlighting heightened economic and geopolitical uncertainty.

This week saw mixed movements across major markets, with the dollar pulling back after four consecutive weeks of gains as US economic data delivered a mixed outlook.