Look For U.S. Dollar Strength to Fade Heading Into 2024

U.S. growth is likely to lose steam from the lagging impact of Fed rate hikes, setting the stage for bond yields to fall further and pressuring the U.S. dollar, according to Corpay's Peter Dragicevich in a note. The currency strategist says the upswing in U.S. bond yields and the relative strength of the U.S. economy "were pillars behind the USD's outperformance a few months ago," but as these fade–and assuming growth in China continues to pick up and spills over into the Eurozone, Asia and Australia–"we expect the USD to continue to gradually weaken over the next few quarters." The dollar is little changed against the Aussie dollar, up 0.8% against the euro, 0.5% higher versus the British pound and down slightly against the yen.