The Lombard Review
Markets & Finance Special Report

New Year's Eve: The dollar's big year

Growth and rate gap drive USD

A U.S. hundred-dollar bill
A U.S. hundred-dollar billPhoto: Revisorweb / Wikimedia Commons, Public domain
1 min read Data: DXY ~+7% in 2024

As the final trading session of 2024 concludes, foreign exchange markets can look back on an exceptional year of dollar supremacy. The US Dollar Index (DXY) registered an impressive annual gain exceeding seven per cent, routing major developed and emerging market currencies alike.

The Bureau of Engraving and Printing, which prints U.S. currency
The Bureau of Engraving and Printing, which prints U.S. currencyPhoto: Harrison Keely / Wikimedia Commons, CC BY 4.0

The Unrivalled Dollar Hegemony

The dollar’s extraordinary performance was powered by an unbeatable macroeconomic combination: superior American economic growth, resilient corporate earnings, and interest rate differentials that widened as the Fed curtailed its easing cycle while Europe and China struggled. With the incoming administration promising tariffs and fiscal stimulus, the greenback enters 2025 firmly cemented as the world’s pre-eminent currency fortress.

The Manhattan skyline from Upper New York Bay
The Manhattan skyline from Upper New York BayPhoto: Jakub Hałun / Wikimedia Commons, CC BY 4.0

The US dollar’s dominant performance in 2024 was an unequivocal triumph of American economic exceptionalism, proving that wide growth and rate differentials continue to crown the greenback king.