The start of 2025 is expected to be positive for the dollar, but there are significant challenges ahead, such as increasing inflation and a growing fiscal deficit.

The primary risk to the dollar's strength is the fiscal deficit, according to 38% of respondents in a Bloomberg Markets Live Pulse survey. Weaker economic growth, both domestically and globally, is also a concern for 32% of survey participants. These concerns are particularly relevant as President-elect Donald Trump prepares to take office in January, with plans to implement tariffs that could further strain economic conditions.

The outlook for the dollar remains uncertain, with market participants closely monitoring developments in fiscal policy and economic performance.