Converge Market Update: FX in the Greenback’s shadow

2024 has so far been about US soft data surprising the consensus to the upside and investors paring back their expectations for rate cuts across the developed world. Naturally, this has led both government bond yields and the US dollar higher.

However, the low volatility rate in the FX space means that while the Greenback has risen against 78% of its global peers in the first quarter of 2024, the year-to-date gain has only been slightly above 3%. It will get harder for the US dollar to sustain the momentum given (1) how much Fed easing has already been priced out and (2) that the business cycle is turning positive.

Still, the surprising strength of the US economy and central banks outside the US turning dovish has so far shielded the dollar from any negative headwinds. Join macro analyst Boris Kovacevic as he breaks down this week's market news.

Disclaimer: Converge is Convera’s new podcast that discusses a range of financial services topics. We want to remind our listeners that the information shared on this podcast is for informational purposes only and should not be considered financial advice. Please note that the opinions expressed on Converge are solely the opinions of the host and the guests, not Convera’s.