Fed’s rates policy likely to make 2024 ‘the year of the dollar dive’ – deVere CEO

The U.S. dollar is likely to weaken “consistently” in 2024, the head of global financial consultancy deVere argues, citing large-scale current sell-offs of greenbacks by investors in the expectation of multiple rate cuts by the U.S. Federal Reserve.

“Investors increasingly believe that the Federal Reserve’s most aggressive interest rate hiking campaign in a generation is winding down,” a statement from deVere quotes Nigel Green, the company’s CEO and founder, as saying.

“With the battle against inflation being won, it can be expected that the central bank will roll out multiple rate cuts in 2024,” Green says.

This would make dollar-denominated assets less attractive and prompt investors to dump such assets and look for sources of higher yields. “The big dollar sell-off is on,” the deVere chief says.

This would make the American currency plunge. “The dollar traditionally performs well at the start of the year” but is likely to “consistently weaken” during the course of 2024, which “could be dubbed ‘the year of the dollar dive’”, Green says.

The dollar’s weakening would have mixed international effects, according to Green.

It would, for example, enable emerging market economies that carry considerable amounts of dollar-denominated debt to pay less in servicing it. On the other hand, it would cause tensions between the United States and its trading partners by boosting American exports, Green says.

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