US Dollar depreciation to gather pace in 2024 – Wells Fargo

Economists at Wells Fargo see potential for pronounced US Dollar depreciation as 2024 progresses across a wide range of economic scenarios.

US Dollar closing in on turning lower

While US economic outperformance could support the Greenback into early next year, we expect broad US Dollar depreciation as 2024 progresses. 

Progress on the inflation front means Fed rate cut risks are tilted toward sooner rather than later, which should limit Greenback gains. 

A hard landing or US recession next year would see interest rate and growth trends swing against the US currency. A soft US landing, combined with inflation progress and lower US yields, could support broader financial market sentiment, which would also weigh on the ‘safe-haven’ support for the USD. 

As the global monetary policy cycle turns to easing, broad US Dollar depreciation is looking increasing likely across a wide range of scenarios.