The US dollar Index (DXY) might crash to the 96-97 range during the end of this quarter in March 2024. Local currencies are most likely to rise in the coming months denting the prospects of the US dollar. The DXY index, which gauges the US dollar’s strength against six leading currencies was down 0.25% on Monday. The US dollar is hovering around the 103.8 mark after briefly rising from 102 points early this month. However, the index is dangerously low and close to dipping below the 100 mark.
Also Read: BRICS: China Stockpiling 1.39 Million Barrels of Oil Every Day
US Dollar Could Crash Towards 96-97 Level in March 2024, Predicts Currency Analyst
Leading currency and forex analyst Abhilash Koikkara predicts that the US dollar could fall to the 96-97 level in March 2024. The sharp decline could come after the labor market tightens leading to the erosion of the DXY index.
Also Read: BRICS: Chinese Yuan Beats US Dollar as Top Traded Currency in Russia
The dollar index gained strength in 2023 due to the Federal Reserve’s monetary policy of hiking interest rates. However, there are expectations of a first interest rate cut in March 2024, that could impact the US dollar. It is anticipated that the DXY index could slip towards the 96-97 range when that happens making the US dollar bleed. Reports suggest that the Federal Reserve could cut interest rates by 150 basis points.
“The Dollar Index is relinquishing its 2023 gains due to a shift in the Federal Reserve’s monetary policy. There is an expectation of the first rate cut in March 2024, with the index initiating a downward trend following the December meeting. It is anticipated that DXY may drop below its previous low of 99.60 and could potentially test the 96.00-97.00 range in the upcoming quarter,” said Koikkara to Mint.
Also Read: BRICS: U.S. Dollar Ranks Last in the Top 10 Currency List
A dip in the US dollar will only strengthen local currencies making them reach new monthly highs in March 2024. Read here to know what leading global bank HSBC has to say about the US dollar’s prospects in 2024.