As the year draws to a close, it's an opportune time to evaluate the potential trajectory of the dollar going forward. From a broader perspective, we anticipate a regime shift for the dollar in 2024, potentially marking significant turning points for the major dollar pairs. Notably, since the 1990s, each instance when real rates crossed the 1% threshold, the dollar experienced an average sustained fall of approximately 18% over around 340 days. The combination of aggressive hikes and lower inflation has now pushed real rates clearly above the 1% mark, but the dollar’s reaction thus far has been rather muted when considering the past 3 reactions.
What’s ahead for the dollar?
What’s ahead for the dollar?
What’s ahead for the dollar?
As the year draws to a close, it's an opportune time to evaluate the potential trajectory of the dollar going forward. From a broader perspective, we anticipate a regime shift for the dollar in 2024, potentially marking significant turning points for the major dollar pairs. Notably, since the 1990s, each instance when real rates crossed the 1% threshold, the dollar experienced an average sustained fall of approximately 18% over around 340 days. The combination of aggressive hikes and lower inflation has now pushed real rates clearly above the 1% mark, but the dollar’s reaction thus far has been rather muted when considering the past 3 reactions.