The dollar index slipped to around 108.3 on Thursday, starting the year on a subdued note following a strong performance in 2024.

Last year, the dollar strengthened by approximately 7% against a basket of major currencies, as the Federal Reserve signaled a more cautious stance on interest rate cuts amid ongoing inflationary pressures. The dollar also received a boost from Trump's imminent return to the White House, with his proposed policies—such as deregulation, tax cuts, higher tariffs, and stricter immigration measures—seen as pro-growth and inflationary.

Additionally, concerns over slower growth in other major economies and persistent geopolitical risks contributed to safe-haven flows into the dollar. Looking ahead, traders are closely monitoring Thursday's weekly jobless claims data for further insights into the health of the labor market.

Source: Trading Ecnomics