Dollar Forecast: Bulls Expected to Dominate 2024 – Action Forex
In the world of finance, a quiet holiday week is on the horizon, but that doesn’t mean there won’t be any fireworks to watch out for. As we head into the new year, the focus remains on manufacturing PMIs, particularly in the United States, which could have a significant impact on market movements. Let’s dive into the details to see what lies ahead in the financial landscape for 2024.
Manufacturing PMIs in the Spotlight
The upcoming week is expected to be relatively calm due to the mid-week market closure for New Year’s Day celebrations worldwide. However, all eyes will be on S&P Global’s manufacturing PMIs and the ISM gauge in the US, as they are likely to be the main drivers of any significant market shifts in the coming days.
Throughout the year, global manufacturers have faced challenges, with most major economies experiencing a modest rebound in manufacturing activity from the lows of 2023. While some regions have shown improvement, the Eurozone has remained in contractionary territory for the entire year. In China, there has been a slight discrepancy between official government metrics and independent gauges, with the latter performing better.
For December, we can expect a modest uptick in manufacturing PMIs, maintaining the recent trend. However, any surprises in the data could either boost or dampen regional stocks, depending on the outcome.
Can ISM Mfg. PMI Stop the Dollar’s Advance?
In the United States, the manufacturing sector had a strong start to the year but faltered in the second half, impacting the overall economy. The latest data suggests that cost pressures are easing, potentially helping to alleviate recent layoffs in the sector. As we look ahead to December, the ISM manufacturing PMI is forecasted to dip slightly, while the prices index is expected to rise.
The performance of the dollar will likely be influenced by the ISM data and any updates on the economy. Investors will also be paying attention to Trump’s commentary for further insights into the market direction.
Trump a Risk for New Year’s Volatility
With Trump’s inauguration looming, speculation is mounting about his policy priorities in office. Recent events surrounding the spending bill and tariff threats have raised concerns about potential market impacts. Any developments on tariffs or fiscal policy during the holiday period could lead to spikes in Treasury yields, affecting FX and equity markets.
As we enter 2024, keep a close watch on how these factors play out in the financial realm, as they could shape market trends for the rest of the year. Stay informed, stay vigilant, and be prepared for any surprises that may come your way in the world of finance.