The US dollar has rebounded this month, although sterling is the most appreciated currency in the G10 in 2024. Economists at Société Générale analyze the outlook for the currency market.
GBP vulnerable to weak economy
We expect the Fed to cut rates much more aggressively than the ECB in 2024, which would allow the Euro to post modest gains despite weak growth, but the data we have seen so far this month has not changed the market sentiment.
Lower US rates should also help the yen, but that may be a story for spring rather than mid-winter. Of course, there is no indication that the Bank of Japan will help the yen bulls by tightening monetary policy in the near term.
The British pound may do well for now, but it is vulnerable to a weak economy and the Bank of England has more room than the ECB to cut rates.
NOK and SEC look more attractive as they continue to get some breathing room as relative rates retreat a bit in their favor. Meanwhile, AUD/NZD looks increasingly lower relative to yield spreads.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
