In the second half of 2023, the US dollar did very well. However, it is likely to lose value in 2024 as the Federal Reserve gets ready to lower interest rates. The dollar went up in value in the second half of 2023 because the US economy grew quickly. In Q3, the economy grew by 4.9% YOY, even though inflation rates were going down. Because of this growth, keeping dollars has become more appealing, especially since investors think that global demand will drop, which could hurt Asia and Europe.

But the picture for 2024 points to a change. Because of this, the Federal Reserve lowered interest rates by 150 basis points starting in the second quarter. People see this change as in line with the Fed's dual mission, and it's thought to be the end of what has been called "US Supremacy." Because of this, buyers may be able to find ways to spread and improve non-dollar currencies.

Experts expect the US yield curve to steepen in a bullish way before the Fed's expected first rate cut. During this part of the business cycle, the dollar tends to get lower, which could be good for commodity currencies that are already worthless. Also, as interest rates fall in the US, so may "growth" currencies like the Swedish krona, following the same pattern seen in growth industries like real estate and technology.

Forecasts for the coming year show that the dollar's downward trend could pick up speed all the way through 2024. Different currencies are expected to get stronger against the dollar by the end of the year. The YUAN could go up by 2%, while Scandinavian currencies could go up by as much as 13%. It's possible that the EUR/USD exchange rate will reach 1.15. Still, it's important to keep in mind that this view could change for a number of reasons, such as problems with energy supplies from the Middle East or changes in politics, like Trump's stance on China.

Investors and market players will be keeping a close eye on these events as they change their plans in response to shifting monetary policies and the way the global economy works.