Author: Manh Nguyen Tien

Published on: 2024-02-07

The Strong Dollar is Coming Back (Q1-2024)

Outlook for the USD

Starting from Q1 - 2024, we believe that the Dollar will regain its strength in the currency market and this may last till Q2.

3 reasons and the economies

  1. Unemployment and Rate Cut:
    Unemployment raises highly. (Even in Jan 2024, 118 U.S. companies laid off 30,995 jobs).
    Despite the economy has started to recover, high interest-rate could be the main reason why businesses are still going for this route.
    A rate cut is likely to happen (70% likely from our POV).

  2. EUR/USD:
    A currency’s strength is meaningful when there is demand from foreign and domestic banks.
    The EUR/USD pair is a good indicator in this context. Eurozone’s economy is heavily slowing down, inflation returns, there’re not many new directions for the region.
    EU’s economy is at risk for a deep decline, which will result in Euro’s de-valuation, thus supporting USD’s strength.

  3. Gold is at a high price:
    And will reverse. The liquidity flow is being directed to new technological trends where the U.S. is still a leader. Other assets will be impacted in these quarters (Bitcoin, etc.).

What to do next?

After Asia’s New Year celebration, we would expect new market conditions to form.
BlackFox monitors the market closely and may have new predictions for up-coming economic events.