Market expects the Federal Reserve to act cautiously, and the US dollar hits a two-year high.

On January 2, the Golden Data reported that the US dollar index rose to a two-year high because the market expects the Federal Reserve to take a more cautious approach to rate cuts in 2025. The market bets that the policies of President-elect Trump, including proposed trade tariffs and tax cuts, will exacerbate inflation, limiting rate cuts. Danske Bank's Muhammad Saraf said in a report: "Due to the resilience of the US economy, the market currently expects the magnitude of the 25 basis point rate cuts for the whole year not to exceed twice, which will support the US dollar." In December last year, the Federal Reserve also hinted at slowing down the pace of rate cuts.