The dollar has decreased in the last trading days of a year dominated by U.S. interest rate hikes and fears of a sharp slowdown in global growth, yet the U.S. currency is still on track to achieve its largest annual gains since 2015. Against a basket of currencies, the dollar has risen by about 8.4% so far in 2022, marking its biggest annual jump in seven years, but it has relinquished some of its gains in recent weeks as investors expect the U.S. interest rate hike cycle to end next year.
The euro rose by 0.2% to 1.0681 dollars and is set to record an annual loss of 6.2% against the dollar, compared to a 7% decline last year. Weak growth in the Eurozone, the war in Ukraine, and the tightening of U.S. monetary policy have pressured the euro this year. The British pound fell by 0.1% and is on track for an annual loss of 11%.
The Australian dollar, viewed as a risk appetite indicator, increased by 0.3% to 0.6796 U.S. dollars, but is on course to record a decline of 6.5% for the entire year. The U.S. dollar dropped by about 0.9% against the Japanese yen to 131.85 yen. The Swiss franc remained stable at 0.92275 dollars.
