Currency Performance in 2024: The U.S. Dollar Dominates Amid Global Economic Struggles

Featured & Cover  Currency Performance in 2024 The U S Dollar Dominates Amid Global Economic Struggles

In 2024, numerous currency pairs saw unexpected declines, with the U.S. dollar strengthening significantly against major currencies. One of the most notable trends was the euro nearing parity with the dollar. This shift highlighted the strength of the U.S. economy, which stood in stark contrast to the sluggish growth in the Eurozone and subdued economic activity in China. Furthermore, the prospect of President Trump’s return to the White House added fuel to the dollar’s rally. His administration’s proposed tariffs and the renewed optimism about the U.S. economy played a significant role in driving the dollar higher.

According to data from TradingView, the graphic illustrating the performance of major currencies against the U.S. dollar in 2024 provides a detailed look at these shifts. Most currencies weakened as the U.S. dollar surged, largely due to the effects of elevated interest rates in the U.S.

Global Currency Returns in 2024

The majority of major currencies saw declines against the dollar in 2024, reflecting the broader trend of a stronger U.S. dollar. Below is a detailed table showing the performance of different currencies:

Country Currency 2024 Return
U.S. U.S. Dollar Index 7.1%
Great Britain Great British Pound -1.7%
Mexico Mexican Peso -2.0%
China Chinese Yuan -2.8%
India Indian Rupee -2.8%
South Africa South African Rand -3.7%
Eurozone Euro -6.2%
Switzerland Swiss Franc -7.3%
Canada Canadian Dollar -7.9%
Australia Australian Dollar -9.1%
Japan Japanese Yen -10.3%
New Zealand New Zealand Dollar -11.4%
South Korea South Korean Won -12.4%
Russia Russian Ruble -18.6%
Brazil Brazilian Real -21.6%

 

As one of the top-performing currencies against the dollar, the British pound only fell by 1.7% in 2024. This decline was relatively moderate, especially given the overall strength of the dollar. The resilience of the U.K. economy played a crucial role in limiting the pound’s drop. Expectations regarding U.K. and U.S. interest rates largely moved in tandem, which helped keep the exchange rates between the two currencies more stable. Bond yields generally influence demand for currencies that offer similar risk and return profiles, which was evident in the case of the pound and the dollar.

On the other hand, the Canadian dollar faced significant challenges, plunging to a multi-year low of $0.69 USD by December. This decline came amid concerns over potential tariffs. Canada, one of the largest trading partners of the U.S., saw its currency weaken as the U.S. administration proposed a 25% tariff on Canadian exports. The trade between the two countries is heavily influenced by energy commodities, and any disruption in this sector had an outsized effect on the Canadian dollar.

The Brazilian real, however, was one of the worst performers in 2024. It fell to historic lows against the U.S. dollar, driven by investor concerns over the country’s growing government deficit and persistently high inflation. The real’s depreciation was a direct result of these economic issues, which caused significant uncertainty among international investors.

Looking ahead, the Brazilian real is expected to face continued pressure. The country’s public debt remains unsustainable, and tight credit conditions are not helping the situation. In December, the Brazilian central bank raised interest rates to 12.25% in an attempt to curb inflation. However, inflationary pressures remain high, and some analysts predict that rates could increase further, possibly reaching 14.25% by March, marking the highest levels seen in the past eight years.

The U.S. dollar dominated global currency markets in 2024, while most major currencies weakened significantly against it. The resilience of the U.K. economy helped limit the British pound’s losses, while Canada’s currency struggled due to concerns over potential tariffs. The Brazilian real faced the most significant challenges, plunging to record lows amid economic instability. As we move into 2025, the outlook for many currencies remains uncertain, with global economic challenges continuing to exert pressure on currency markets.

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