The Xe Global Currency Outlook - September 2024

Welcome to Xe’s Global Currency Outlook, your go-to resource for understanding the dynamic world of currency exchange. Each month, we’ll bring you the key insights and trends shaping the global currency landscape.

Global Currency Outlook: As the USD Slows, Who's Ready to Rise?

Currency markets are shifting gears as we move toward the final quarter of 2024, and the global economy isn’t making it easy. With the U.S. economy showing signs of fatigue, the USD is set to weaken, especially as the Federal Reserve looks to cut interest rates on September 18. This move will have ripple effects across currencies worldwide, with many economies set to react.

The Eurozone is showing resilience, and the euro (EUR) is ready to capitalize. Thanks to a stronger-than-expected current account surplus, the EUR/USD is expected to rise as the USD declines. Meanwhile, the British pound (GBP) has outperformed its peers recently, bolstered by optimistic revisions to U.K. economic growth. While the Bank of England may cut rates, the pound isn't showing signs of losing much ground against the weakening dollar.

In Canada, concerns are rising about a softening economy. The Bank of Canada is preparing more rate cuts, yet the weakening USD could help strengthen the CAD just enough to balance things out. Over in Asia, China’s property crisis continues to cast a shadow on the economy, but the Chinese yuan (CNY) is still expected to gain against the weakening USD.

Australia and New Zealand are facing volatile times as global economic uncertainty looms large. Despite the Reserve Bank of Australia holding interest rates steady, the AUD remains volatile. Similarly, the New Zealand dollar (NZD) might not weaken as much as expected, even as the Reserve Bank of New Zealand continues to cut rates.

Meanwhile, in Mexico and South Africa, the Mexican peso (MXN) and South African rand (ZAR) are both regaining strength as political uncertainty subsides.

For the global currency landscape, the common thread seems to be a USD on the decline. But how each country manages its own economic challenges will shape the narrative for the rest of 2024.

The content within this blog post is not intended for use as financial advice. This content is for informational purposes only.