2024 will see a global focus on disinflation-fuelled rate cuts, suppressed but steady economic growth and the return of political intrigue with US and UK elections on the horizon, according to Argentex’s latest FX Navigator report published today. The report explores how FX markets and currencies are set to perform in 2024.
The report, authored by Argentex’s Head of FX Analysis Joe Tuckey, notes that 2024 presents the “last mile” for the global 2% inflation target to be reached and that central banks will cut rates in line with disinflation. Timing and the extent of rate cuts will be a key factor driving FX moves this year. However, potentially increasing tensions in the Middle East could pose a risk to the disinflation narrative with higher energy prices.
The UK and US elections loom large for FX markets in 2024. In the UK, Labour’s assertion that they would integrate closer to Europe is seen as a potential sterling positive, whilst in the US, the return of Trump would likely reignite volatility after the relative calm of Joe Biden’s tenure. Markets may become particularly concerned if the Trump regime exits NATO and withdraws support for foreign wars, thus asserting more pressure on other economies to pick up the financial slack.
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