JP Morgan, HSBC and FIL expect dollar’s gains to continue next year

Three major financial institutions expect the dollar’s gains to continue in 2024, despite the inevitable reduction in US interest rates by the US Federal Reserve by up to 75 basis points.

JP Morgan, HSBC and Fidelity International (FIL) are among the few names that see the dollar’s gains continuing next year, despite the now inevitable reduction in US interest rates, by up to 75 basis points in 2024, according to what was indicated by the last Fed meeting in 2023, and including Up to 150 basis points, according to what traders believe in a survey conducted in mid-December, reports Al-Anba daily.

These institutions are based on the ability of the American economy to bear high interest rates, an advantage that is not enjoyed by many other global economies, which may face an economic recession if their interest rates continue at their current levels.

These economies, including the European Union and Britain, may be forced to reduce interest rates at a pace that may be faster than the United States, which will keep US interest rates higher than their counterparts and support the dollar, once again, as the currency that is most generous with interest returns.

Paul McKeel, global head of currency research at HSBC, believes that it is surprising that the consensus is that the US dollar will be the loser in 2024, in an opinion agreed with by George Efstathopoulos, portfolio manager from Fidelity, who believes that Europe and Britain are the closest to recession, which will again be in the interest of the dollar. As a safe haven.

Morgan Stanley’s head of G10 currency strategies, David Adams, believes that the idea of the dollar’s strength continuing for a longer period is supported by the superiority of the US economy according to a set of criteria, which will remain fundamental to the strength of the green currency.

Meanwhile, JP Morgan believes that the dollar’s gains will come mainly from the continuation of global geopolitical tensions. As the US elections approach, traders are awaiting opinion polls that will be conducted throughout the year as to whether the next President of the United States will be a Republican or a Democrat.

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