This poses a serious threat to the attractiveness of the dollar, as central banks of other countries may maintain high interest rates longer, the agency explains its forecast.

The year 2023 coming to an end will be the worst year for the US dollar since the coronavirus pandemic began in 2020. Bloomberg added that this trend could continue as the US stock market expects interest rates to fall. Fed: This will reduce the attractiveness of the currency.

In 2023, the US currency index, calculated by the agency, fell by almost 3%. This is the worst result and the biggest decline since 2020.

The sharpest contraction occurred in the fourth quarter, amid rising expectations that the Federal Reserve will ease policy next year in 2024. As the agency explains, this reduces the attractiveness of the main reserve currency. This is because other countries’ central banks may continue to tighten monetary policy and keep their rates high longer than the Fed.

The dollar may strengthen before the US presidential elections in November 2024, however, the presence of Donald Trump among the candidates threatens political turmoil and volatility of the national currency, analysts from the Japanese company Market Risk Advisory summarize.

“This information is for informational purposes only and does not constitute an individual investment recommendation.”