USD Forecast for 2024 and Beyond

The US dollar (USD) remains one of the most widely held and traded currencies worldwide. It is not just central to international trade; USD significantly influences and mirrors trends in global economic growth. How the dollar performs in coming years will significantly sway currency markets, cross-border capital flows, and the global market outlook. In this article, we will dive deeper into US dollar rate predictions for 2024 and beyond to provide you with valuable insights into the currency market and broader financial landscape.

Table of Contents

What Is USD: Key Features

USD Projections for 2024

USD Forecast for 2025

US Dollar Technical Analysis

EUR/USD Price Prediction

GBP/USD Price Prediction

USD: Historical Price Movements

What Drives the USD Price?

Forecasting USD Value

Conclusion

FAQ

What Is USD: Key Features

The US dollar stands as the world's reserve currency. Here are some important features to know about this currency:

• The United States dollar has a role of a store of value, medium of exchange, and unit of account for transactions.
• It has high liquidity and stability.
• The USD price is driven by multiple factors such as the Federal Reserve's monetary policy, US interest rates, inflation, and overall economic performance.
• Many countries peg their local currencies to the dollar to increase their stability and foster international trade.

USD Projections for 2024

While a precise US dollar prediction remains challenging, USD is likely to remain a key player in the currency markets. As for its price, there's a split in market sentiment regarding this asset. Some experts believe that USD will have a bearish outlook in 2024 due to expectations of interest rate cuts. Others anticipate the US dollar to remain in high demand in 2024.

According to Isabella Rosenberg of Goldman Sachs Research, in 2023, the US dollar maintained its value despite resilient global growth. The same situation is likely to happen in 2024.

Rosenberg explains: “While it might be compelling to forecast dollar depreciation from the top down, US outperformance in 2024 means that the dollar should remain in high demand.”

In contrast, the Federal Reserve expects a bearish sentiment for USD and believes that the US dollar rate will drop to 4.6% in 2024.

USD Forecast for 2025

Looking ahead to 2025, there's a range of views on where the US dollar is headed.

The World Bank is leaning towards a less dominant role for the USD as the go-to reserve currency, citing quicker growth in emerging markets, which they see expanding at 4.7% per year, overshadowing the 2.3% growth in more developed nations.

On the other hand, the Economy Forecast Agency sees a steadier future for the dollar, predicting the DXY index, which measures the USD against a basket of other currencies, to stay around 110 in 2025, indicating the dollar's enduring strength.

WalletInvestor goes further, predicting that the US dollar index can increase to 113.288.

US Dollar Technical Analysis

The USD Index showcases a mixed but generally positive outlook across various time frames, suggesting resilience in the USD's performance. The EUR/USD pair also shows a strong bullish trend, supported by key technical indicators.

Looking at the monthly EUR/USD chart, it’s possible to see a buy signal according to technical indicators and a neutral signal according to MA. The overall signal is neutral.

More detailed information about EUR/USD technical indicators is presented in the table below:

EUR/USD Price Prediction

According to Longforecast, the monthly predictions for the EUR/USD exchange rate in 2024 show fluctuations, with the EUR experiencing both ups and downs against the dollar throughout the year.

The analysis from capex.com provides a broader perspective. They suggest that, despite the short-term volatility, the Euro is expected to surpass the 1.10 level in the coming months.

Morgan Stanley isn't too optimistic about the Euro compared to the US dollar, hinting at some economic hiccups in Europe. They believe Europe's key financial players might cut interest rates starting mid-2024, which could push the Euro down to equal value with the dollar, and it might stay that way throughout the year.

When it comes to what might happen with the EUR/USD rate in the long run, opinions are all over the place. Just remember, these predictions are speculative and can be swayed by many unpredictable market movements and other economic influences.

WalletInvestor thinks the Euro might lose a bit more ground against the dollar in 2025, starting the year at about 1.057 and dipping to around 1.020 by year's end. And the trend seems to lean towards a further drop, with predictions of the Euro sliding to 0.980 by the close of 2026.

Pandaforecast is more optimistic about the long run. According to their analysts, EUR/USD could reach the rate of 1.21 in March 2025 and 1.25 in October 2025.

GBP/USD Price Prediction

For 2024, there's quite a buzz about the GBP/USD pair. Some financial experts are speculating that if the European Central Bank and the Federal Reserve decide to slash interest rates, it could give the British pound a leg up over the dollar. A good number of these experts are feeling optimistic, with predictions that the pound could hit the 1.30 level against the dollar as 2024 wraps up.

Longforecast is riding the positive wave for the GBP/USD pair, anticipating it could climb to around 1.338 by year-end.

Goldman Sachs has updated its GBP/USD outlook, now expecting a rise to 1.25 in three months, up from 1.18, with future predictions at 1.30. This uplift reflects optimism for the pound, despite a strong US dollar forecast. The expected rate cuts by the ECB and Federal Reserve could bolster GBP even further.

ING is pretty optimistic about the GBP/USD pair. They're forecasting that the exchange rate might hit 1.23 early in the year and then climb to 1.28 by the end of 2024.

Looking further ahead, opinions on British pound vs. US dollar predictions vary a lot more among experts.

Coincodex outlines a negative trend in the GBP/USD rate, expecting a decrease to $1.156 in 2026 and $0.95 in 2030. A more detailed table is below:

Longforecast, in contrast, has a more positive view, although the GBP/USD rate is also expected to decline. The forex pair is going to start 2025 at the rate of around 1.307, and drop to 1.229 by December. In 2026 and 2027, GPB/USD is expected to see some fluctuations, yet the rate is expected to stay at approximately the same level.

USD: Historical Price Movements

The USD's path has been shaped by significant events driven by monetary policies, foreign investment trends, and responses to worldwide financial upheavals. Traditionally, when the economic waters get choppy, the USD often gains strength as investors flock to it seeking safety. On the flip side, when the global economy is booming, the dollar tends to weaken, making US investments more attractive and affordable for investors from abroad.

What Drives the USD Price?

The USD price is influenced by a wide variety of factors, which are important for understanding any dollar forecast. Key drivers include but are not limited to:

• The Federal Reserve's monetary policy decisions.
• Economic indicators, including GDP growth, employment rates, and inflation.
• Global events, geopolitical tensions, and trade relations.
• Investor sentiment.

Forecasting USD Value

Predicting the USD price is a complex process. It involves a deep dive into currency markets and involves some crucial steps.

1. Analysis of factors driving USD price. Experts usually consider factors that can drive the price of the US dollar, including the ones described above (economic factors, Federal Reserve decisions, geopolitical events, etc.). Analysis of other currencies.
2. Analyzing other currencies such as the Canadian dollar, Japanese yen, British pound, etc. helps financial experts to gauge the USD's standing.
3. Technical analysis. It’s crucial to conduct a thorough technical analysis and examine past price actions to make a prediction for future movements.

However, traders should remember that guaranteeing the accuracy of such forecasts is challenging due to the myriad factors at play and the unpredictable nature of global events.

Conclusion

The question of "Will the dollar go up?" worries a lot of financial experts, as the USD affects not only the forex market, but defines the global financial landscape. Opinions on future dollar value prediction vary, with some experts predicting the US dollar to keep its firm position, and others expecting its value to decline.

If you consider including this asset in your trading portfolio, remember that, due to the volatile nature of the forex market and various factors that could influence the USD price, it’s crucial to conduct due diligence research and develop a robust trading strategy to mitigate potential risks.

FAQ

What's the forecast for the US dollar?

The US dollar index shows potential for both gains and declines. Goldman Sachs has a bullish outlook for USD, while the Federal Reserve expects a bearish sentiment for this asset, with a decline to 4.6% in 2024.

Will the dollar go up or down tomorrow?

Short-term movements of the US dollar are volatile, and subject to daily market sentiment, foreign investment flows, and economic data releases. All this makes precise next-day predictions challenging.

What сauses the US dollar to drop?

The US dollar might take a hit from various economic and global events, like broad monetary policies, rising inflation, or even if other currencies like the British pound or Euro get stronger on the world stage.

Is the dollar going to get weaker?

Some long-term forecasts suggest the US dollar might face pressure from global economic changes and the relative strength of other major currencies. However, the exact outcomes depend on future policy decisions and economic developments.

What's the US dollar prediction for 2024?

USD forecasts for 2024 indicate a mix of stability and potential growth. However, some experts suggest that expectations of interest rate cuts could weaken the US dollar’s position in 2024.

Why is a dollar tomorrow worth less than a dollar today?

A dollar now has more buying power than one in the future, mostly due to inflation and the time value of money. This is because prices tend to go up over time, reducing what you can buy with a dollar later on.