Resilient US Dollar Defies Expectations: Expert Forecast as of 29.12.2023

By Gustavo Nils Dec29,2023

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The fourth quarter of the 2023 year was extremely unsuccessful for the USD index. Nonetheless, 2024 could change those fortunes, based on some of the most recent developments. While there have been many contradictions in the market as of late, there are strong reasons for optimism when looking ahead. For starters, the best G10 currencies going into 2024 are likely to be the Swiss franc and the British pound. On the other hand, the worst performers might be the Japanese yen and the Norwegian krone. It is interesting to note that central banks of some of these countries may opt to change their monetary policies in 2024, which could have a significant impact on their respective currencies.

Ultimately, the fall of the greenback should be a cause for optimism, as it reduces the costs of servicing and repaying dollar-denominated debts, and also stimulates international trade. Moreover, the global economy as a whole is in recovery, and with the level of global risk appetite growing stronger, things are indeed looking up for the EURUSD trading pair. This also leads to a favorable external environment for the euro, despite being an otherwise weaker currency.

Furthermore, although the medium- and long-term prospects for the main currency pair appear bullish, an upward correction may very well occur in the short term. The S&P 500 is on the brink of seeing its longest winning streak since 2004, and this period of bullishness may ultimately come to a halt at some point. That being said, the overall forecast for Euro/US Dollar trading looks bright.

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