Daily Market Pulse
US Dollar's Future in Doubt as Global Economy Expands
2 minute readAmid ongoing worldwide expansion, the most pressing concern in the market at present is whether the US dollar will retain its value through 2024. When economic expansion is robust, the USD is typically anticipated to underperform relative to riskier currencies. Much higher than anticipated, the US economy is projected to expand 2.4% in 2023. This is considerably higher than the .4% growth projections by consensus to begin the year.
Due to the economic difficulties in China and Europe, cross-border asset flows appear to have favored the US dollar. For 2024, the consensus estimate for the US GDP is approximately 1%. Based on the consensus 2023 growth at this time last year, the trajectory for this time next year is uncertain. The consensus forecasts for the main currencies are provided below. Should you require access to additional currency forecasts, please feel free to contact your account manager.
Today we will hear from Fed Chair Powell before the FOMC blackout period that begins next week. Most believe he will take a similar tone to most other members of the FOMC, acknowledging the progress in financial conditions. We also hear from several other Fed members, but all eyes will be on Powell. ISM manufacturing out today as well, which is a particular favorite of mine. Surveying 300+ purchasing managers at manufacturing firms across the country is a key indicator of current and future economic conditions. A reading above 50 indicates expansion, below 50 indicates contraction.
