The US Dollar dominated 2024 as the year’s best-performing currency, driven by Donald Trump’s return to the white house and promises of tax cuts and economic revival. 

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Investors cheered as economic data improved, inflation rebounded, and the federal reserve maintained high interest rates under Jerome Powell.

This potent mix propelled the dollar higher, leaving major currencies like the pound and euro trailing. 

‘Winners and losers in 2024 currency race’

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Sterling fell 1.4 per cent to $1.26, while the euro dropped 5.5 per cent to $1.04, with analysts predicting parity in 2025. 

Across the G10, the Japanese Yen and Norwegian Krone also slumped by over 10 per cent. 

However, experts caution that trump’s preference for a weaker dollar could reshape the narrative.

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In emerging markets, Kenya’s Shilling surged 20 per cent, driven by successful government financing and a Eurobond issuance, marking a sharp reversal from earlier lows. 

Sri Lanka’s rupee climbed 11 per cent amid stabilizing inflation, while Liberia’s dollar rose 5 per cent, aided by the International Monetary Fund (IMF) support.

At the other end, Nigeria’s Naira and Ethiopia’s Birr tumbled 41 per cent and 55 per cent, respectively, following shifts to more flexible exchange regimes. 

The Lebanese Lira performed the worst, losing over 80 per cent of its value amid political turmoil and economic collapse, compounded by war and severe devaluation.

While reforms and IMF interventions offer hope for struggling currencies, global economic dynamics remain volatile, with 2025 poised to deliver fresh challenges and surprises in the currency markets.

(With inputs from the agencies)