The greenback has powered to a new nine-year high as investors have started the New Year as they ended the last one: betting on a new era of dollar dominance. The DXY dollar index, which measures the currency against a basket of its biggest counterparts, has gained another 0.6 per cent today as all major currencies except the Japanese yen have lost ground. The euro – the biggest component in the DXY gauge – is particularly weak as investors speculate that the European Central Bank will soon be forced to start buying sovereign bonds to reinvigorate the eurozone economy and prevent deflation, even as the US Federal Reserve is contemplating when to hike rates. Société Générale analysts said that the US dollar "has ushered in the new year with a galloping start". While a slew of data releases later this week will decide whether the gains are maintained, the French bank's strategists reckon that the greenback will continue to climb ahead of a likely first Fed hike in mid-2015. Some analysts fret that a short-term correction could be on the cards after heavy betting on the dollar in recent months, but hedge fund manager Stephen Jen of SLJ wrote a note to clients last week predicting that the greenback would continue to enjoy a positive momentum for the first half of 2015

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