Counting down the final seconds to the 2022 trading close, the US dollar continued to extend its decline in the European session.
At the time of writing, the dollar index which measures the greenback's strength was trading weak at 103.75 against a basket of major currencies.
However, the ending for the currency king this year was better following the aggressive steps of the Federal Reserve (Fed) in raising its interest rates to fight inflation.
The US dollar is on track for its best performance in 7 years with gains of over 8% in 2022.
The Fed has raised rates by 425 basis points since March to ease price pressures, but the move also pushed the dollar higher.
On the other hand, the very loose monetary policy stance of the Bank of Japan (BOJ) plunged the yen over 13% to 151.94 against the USD, causing it to experience its worst performance since 2013.
However, the intervention of Japan and the central bank in the bond market helped somewhat to cushion the losses and helped it to recover to trade at 131.70 at the time of writing.
Meanwhile, the euro is on track for a fall of more than 6% this year, pressured by weaker European Zone growth, the Russia-Ukraine war and a more hawkish Fed.
The pound was trading down almost 11% after chaos sparked by UK political drama pushed the currency to an all-time low in September.
Policymakers from the European Central Bank and the Bank of England have signaled that more rate hikes are on the way next year, in an effort to lower inflation despite increasing the risk of recession.
On the other hand, the Aussie dollar is headed for a fall of almost 7%, and the New Zealand dollar has lost more than 7% this year.
Both currencies, sensitive to China's growth, have a better outlook in 2023 following the reopening of the Great Wall.
The Canadian dollar is set to lose around 7% due to a more hawkish Fed, although at the same time the Bank of Canada (BOC) is also actively raising interest rates to fight inflation.
