Predicted Fall: US Dollar Could Hit 96-97 Range in March 2024

• Potential for US Dollar Index Crash Projected for 2024
• US Dollar Predicted to Fall to 96-97 Level in March 2024 by Top Currency Analyst
• 2023 Gains of Dollar Index at Risk
• Shift in Federal Reserve's Policy Could Impact Dollar Index
• Possible Impact on Local Currencies

Potential for US Dollar Index Crash Projected for 2024

The US Dollar Index (DXY) may potentially see a crash to the 96-97 range towards the end of Q1 in March 2024. In contrast, local currencies are projected to increase over the following months, thus adversely impacting the US dollar's standing. The DXY, an indicator of the US dollar's power against six primary currencies, fell by 0.25% on a recent Monday. Currently, the US dollar is hovering at around the 103.8 mark, following a brief surge from 102 points earlier in the month. However, the index is precariously low and is nearing a potential drop below the 100 mark.

US Dollar Predicted to Fall to 96-97 Level in March 2024 by Top Currency Analyst

Foremost currency and forex analyst, Abhilash Koikkara, forecasts that the US dollar could plummet to the 96-97 level in March 2024. This significant drop could potentially follow a tightening in the labor market, leading to the DXY index's erosion.

2023 Gains of Dollar Index at Risk

The dollar index experienced a gain in strength during 2023, bolstered by the Federal Reserve's monetary policy of hiking interest rates. However, speculations are rife about a potential first interest rate cut in March 2024, which could affect the US dollar adversely. Experts anticipate the DXY index might slide towards the 96-97 range when this occurs, causing a potential hit for the US dollar. Reports suggest that the Federal Reserve may reduce interest rates by 150 basis points.

Shift in Federal Reserve's Policy Could Impact Dollar Index

Koikkara commented on the situation, explaining, The Dollar Index is giving up its 2023 gains due to a shift in the Federal Reserve's monetary policy. The expectation of the first rate cut in March 2024, with the index beginning a downward trajectory following the December meeting, is anticipated. There's the possibility that the DXY might drop below its previous low of 99.60 and could test the 96.00-97.00 range in the approaching quarter.

Possible Impact on Local Currencies

A decline in the US dollar would likely strengthen local currencies, potentially elevating them to new monthly peaks in March 2024. For more insights on the US dollar's prospects in 2024, see HSBC's global bank predictions.

Edited by Jonathan Stoker