Since the Federal Reserve announced that it would look to lower interest rates in 2024, rates are rapidly falling. The U.S. dollar has also weakened significantly, which is not unusual when rates drop. This is due to there being less incentive to save money in a country’s currency when its rates are lower. As a result, I expect the dollar to weaken significantly further in 2024 as rates continue to fall.
A weaker dollar is bullish for commodities to watch as it will take more dollars to buy the same amount of each commodity. China’s recent decision to add $137 billion to its national debt will also boost the economy, if only due to the country’s size. The EV revolution and the energy transition are also bullish for certain commodities to watch.
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