US Dollar Index Makes Weakest Annual Gain in 2019

The US dollar index made the smallest annual gains ever recorded in 2019, climbing only about 0.24% higher, driven by a sudden weakness

Arslan Butt•Wednesday, January 1, 2020•1 min read

The US dollar index made the smallest annual gains ever recorded in 2019, climbing only about 0.24% higher, driven by a sudden weakness brought on in December over rising hopes for the phase one trade deal. At the time of writing, the US dollar index DXY is trading around 97.06.

The US dollar slid lower on Tuesday after President Trump announced that the partial trade agreement will be signed between the US and China on January 15 at the White House. In addition, Trump is set to travel to Beijing to start the second phase of trade talks after the signing ceremony.

The improvement in trade tensions between the two world leaders is suppressing the greenback’s safe haven appeal and driving the risk appetite in global markets higher. As a result, traders are moving their investments from the dollar to riskier assets like commodity currencies and even the Euro and the GBP.

For the most part of the year, the US dollar had traded strongly, supported by robust performance of the US economy and positive economic data releases. However, the sentiment changed when trade tensions abated and uncertainty surrounding the trade war began to fade.

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ABOUT THE AUTHOR See More

Arslan Butt

Lead Markets Analyst – Multi-Asset (FX, Commodities, Crypto)

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.