Jakarta, CNBC Indonesia – The United States (US) dollar is currently so strong that it is bulldozing the currencies of several countries, where the strength of the US dollar seems to be due to market expectations after Donald Trump’s victory as the next US President.
Reporting from Refinitiv on Friday (15/11/2024), the US dollar index (DXY) closed at 106.69, slightly up 0.02% from the trading position the day before. This position is the highest since November 2023 or a year ago.
In fact, in the last week alone, the US dollar index managed to fly 1.61%. In the last month, it is known that the US dollar index has shot up to 2.99%.
There are several factors that make the US dollar increasingly powerful. First namely Trump’s victory in the 2024 US Election. Understandably, Trump has stated on several occasions that he wants to make it happen strong dollarstrong US dollar.
Second namely regarding the attitude of the US central bank (Federal Reserve/The Fed) which is starting to return hawkishafter having time to act a little dovish market players responded with disappointment.
Fed Chairman Jerome Powell indicated that the Fed would slow down cutting interest rates. This condition is based on strong US economic growth. The Fed even said US economic growth was one of the best in the world.
“The economy is not sending a signal that we should rush to lower interest rates,” Powell said in remarks to business leaders in Dallas, quoted from CNBC International.
The US economy grew 2.8% in the third quarter of 2024, slightly lower than expected but still higher than the US historical trend of around 1.8%-2%. Initial projections show the US economy will grow 2.4% in the fourth quarter of 2024.
Powell also added that the labor market remained strong despite disappointing employment issues in October that he largely attributed to hurricane damage and worker strikes. Number of jobs non-farm payrolls (NFP) only increased by 12,000 in October 2024, the lowest since December 2020.
Regarding inflation, he said that there had been progress and that Fed officials predicted that inflation would continue to move back towards the 2% target. However, this week’s inflation data showed a slight increase in consumer and producer prices that were further away from the Fed’s target.
“Inflation is moving closer to our long-term target of 2%, but it is still not there. We are committed to completing this task,” Powell said.
For the record, US inflation crept up to 2.6% (year-on-year/yoy) in October from 2.4% (yoy) September 2024. The unemployment rate reached 4.1% in September 2023. The unemployment rate even touched 4.3% in July 2024, which was the highest record since October 2021.
In the midst of the US dollar which is experiencing appreciation, there are nine other currencies which, when compared to the US dollar, are classified as stronger.
The strongest currency in the world is the Kuwaiti dinar, followed by the Bahraini dinar, and in third place is the Omani riyal.
CNBC INDONESIA RESEARCH
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(chd/chd)
The Mighty Dollar: Strutting Its Stuff in 2024
Jakarta, CNBC Indonesia – Well, folks, grab your wallets and engage your wallets because the US dollar is flexing its muscles like it’s been hitting the gym all pandemic! Yes, it’s so strong that it’s bulldozing currencies like it’s the bulldozer in an episode of Wacky Races. The strength surge can be traced back to none other than the former reality TV star himself — Donald Trump. Buckle up, because this rollercoaster looks set to continue!
According to Refinitiv, the US dollar index (DXY) has swung into action, closing at 106.69—a position it hasn’t shown since last November. That’s quite the comeback! In fact, in just a week, the US dollar index has soared by a staggering 1.61%. Over the last month, we’re looking at a 2.99% leap and it’s not even wearing a cape! Let’s be honest, it’s either the dollar or Lean Cuisine that’s making all the right moves.
Why So Strong, Dollar?
Now, why is our good old pal, the dollar, having such a glow up? Let’s break this down into two key factors.
First up: Trump’s Victory! Yes, you heard it right! After what feels like a thousand presidential debates, Trump has emerged victorious in the 2024 US Election, and he’s been vocal about wanting ‘a strong dollar’—The kind of strong that makes you question your life choices over a glass of cheap wine. Coincidentally, when a billionaire says he wants a strong dollar, you better believe the markets are listening.
Second, the Fed’s Stance: You know, the folks who control the money supply as if it’s Monopoly money. Fed Chair Jerome Powell is feeling a bit hawkish these days. No, hawkish isn’t a new skincare regimen — it’s just a fancy term for being less inclined to cut interest rates despite pressure to do so. He’s touted US economic growth as stellar, showing off a 2.8% growth rate for the third quarter, proving that the economy isn’t just a flash in the pan but more like a good, slow-cooked roast.
Job Markets & Inflation: A Balancing Act
Now, it’s not all rainbows and sunshine. The job market has seen some turbulence. The non-farm payrolls only increased by 12,000 in October—the lowest since December 2020. Did we suddenly land in a blockbuster movie where everyone gets laid off? Powell chalks this up to hurricanes and strikes, which feels more like a plot twist than a stat, doesn’t it?
Let’s talk inflation: The Fed seems adamant that inflation will step closer to its 2% target, but currently, we’re sitting at 2.6%—just close enough to touch but not quite close enough to invite to brunch.
The Currency Championship
And while the dollar struts around like it owns the joint, let’s not forget about the competition. Nine other currencies are trotting behind, with the Kuwaiti dinar prancing at the front of the pack, followed closely by the Bahraini dinar and the Omani riyal. The dollar may be strong, but it’s not the only peacock spreading its tail feathers!
Final Thoughts
The dollar’s heavyweight status right now is a great talking point at parties. It’s the equivalent of walking into a gathering and declaring you just got a new puppy; suddenly everyone’s intrigued! With Trump at the helm and the Fed holding tight to those interest rates, you’d better believe this dollar ballad is far from over.
So, what’s next? Grab some popcorn because the dollar is giving us a performance worthy of its own Netflix special. Just ensure you’ve got a foreign currency exchange app on your phone—because with these trends, you might just want to hedge your bets!
Jakarta, CNBC Indonesia – The United States (US) dollar is currently experiencing remarkable strength, effectively overpowering numerous global currencies. This surge in the dollar’s value is largely attributed to market sentiments following Donald Trump’s victory as the next US President, sparking optimism among investors.
Reporting from Refinitiv on Friday (15/11/2024), the US dollar index (DXY) closed at an impressive 106.69, marking a modest increase of 0.02% from the previous day’s trading figures. This closing level is the highest since November 2023, showcasing a year-on-year recovery and robustness in the American currency.
In the past week alone, the US dollar index surged by 1.61%. Over the past month, the index has seen an increase of 2.99%, reinforcing its bullish trend as traders’ confidence swells.
There are several factors contributing to the increasing power of the US dollar. First, Trump’s win in the 2024 US Election is significant. He has consistently stated his intention to bolster the value of the strong dollar, stirring positive forecasts among investors.
Second, the Federal Reserve’s (The Fed) shift toward a more hawkish stance, after a period of relative dovish policies, has led market players to reassess their strategies. Fed Chairman Jerome Powell’s indication that the central bank intends to slow down interest rate cuts reflects confidence in robust economic growth in the US. This approach comes even as the Fed paints a broad picture of the American economy as one of the strongest in the world.
The US economy demonstrated a growth rate of 2.8% in the third quarter of 2024, slightly below analysts’ expectations yet still outpacing the historical average of 1.8%-2%. Preliminary forecasts suggest a predicted growth rate of 2.4% for the upcoming fourth quarter of 2024, which could further bolster the dollar’s value.
Powell remarked, “The economy is not sending a signal that we should rush to lower interest rates,” emphasizing a cautious yet optimistic outlook for the labor market, which continues to show resilience despite some disappointing employment figures in October. The number of jobs in the non-farm payrolls (NFP) category only rose by 12,000 in October 2024, marking the lowest increase since December 2020, a development influenced by factors such as hurricane damage and strikes disrupting the labor force.
On the issue of inflation, Powell acknowledged progress, noting that Fed officials anticipate inflation levels to continue inching back toward the targeted 2%. Nevertheless, recent inflation data has shown a slight uptick in consumer and producer prices, keeping them distanced from the Fed’s goal. “Inflation is moving closer to our long-term target of 2%, but it is still not there. We are committed to completing this task,” Powell stated.
For the record, US inflation rose to 2.6% (year-on-year/yoy) in October, a slight increase from 2.4% (yoy) in September 2024. Alongside this, the unemployment rate stood at 4.1% in September 2023 and had previously risen to 4.3% in July 2024, representing the highest level since October 2021.
As the US dollar continues to appreciate, it is interesting to note that there are nine other currencies which, when compared to the US dollar, remain stronger. The Kuwaiti dinar holds its ground as the strongest currency in the world, followed closely by the Bahraini dinar and the Omani riyal in third place.
CNBC INDONESIA RESEARCH
[email protected]
(chd/chd)
How are recent job figures affecting public sentiment regarding the stability of the labor market in the fourth quarter of 2024?
Urth quarter of 2024. Despite some recent disappointing job figures—such as the non-farm payrolls only increasing by 12,000 in October 2024—the overall sentiment surrounding the labor market remains optimistic, with Powell attributing the job market’s fluctuations to temporary factors like hurricane damage and labor strikes.
Inflation rates have been a prominent topic as well. Powell mentioned that while there has been progress in steering inflation closer to the Fed’s target of 2%, the most recent data revealed an uptick in consumer and producer prices. As of October 2024, inflation was reported at 2.6% year-on-year, up from 2.4% in September 2024, which underscores the challenges still facing policymakers.
The unemployment rate has also been a concern, reaching 4.3% in July 2024, the highest it has been since October 2021. This indicates some softness in job creation despite the overall narrative of a strong economy.
Meanwhile, the strength of the US dollar continues to overshadow other major currencies, with the Kuwaiti dinar, Bahraini dinar, and Omani riyal recognized as the only stronger currencies relative to the dollar. With Donald Trump back in office and the Fed’s focused approach on interest rates, it appears the currency markets remain in a state of flux, creating both challenges and opportunities for investors.
As the dollar continues to perform, analysts and traders alike are keeping a close eye on geopolitical developments, economic indicators, and Fed communications. The future will likely see continued fluctuations as market dynamics evolve and respond to domestic and international developments.
