Currency Confidence: Dollar Kicks Off 2024 Strong with Promising Forecast

By Gustavo Nils Jan4,2024

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The dollar had a strong start to the year, leading to a pullback in the EURUSD at the beginning of January. This has led to speculation on what’s to come this year. The prospects for the dollar look to be promising at the start of the year.

Investors initially expected the fed funds rate to drop from 5.5% to 4% in 2024, but they have now reevaluated their stance. The odds of a fed funds rate cut fell from 88% to 77%, which caused the EURUSD quotes to slide.

Moving forward, the US jobs data will be a significant factor in understanding the general direction of the US economy. Market expectations are being revalued, and there is a bearish pullback of the EURUSD.

Despite the pullback, it is still uncertain if a bearish trend is reviving. The European inflation rate may question the aggressive forecasts of the ECB’s deposit rate cut, which could support the euro.

According to JP Morgan, an opportunity to buy the EURUSD may emerge as the eurozone’s economy is showing signs of improvement. However, it is advised to wait for the US jobs data for December before making any major moves.

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