The dollar index fell 0.8%, snapping a six-week winning streak, despite strong U.S. economic data.

The US Dollar Index closed higher, driven by hawkish FOMC minutes and persistent inflation data, while the euro ended lower despite initial gains from positive PMI and inflation figures.

The dollar index hit 109.4, its highest since October 2022, driven by strong U.S. economic growth forecasts, elevated interest rates, and capital inflows, while Trump’s policies boosted growth and inflation expectations.

The Dollar Index ended the week marginally higher, reflecting diminished expectations for rate cuts in 2025, now reduced to 35 basis points. 

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.