Ella 
The global economic growth outlook remains encouragingly resilient, with U.S. economic activity remaining stable at the beginning of 2024, the Eurozone and British economies heading toward a phase of gradual recovery, and China’s economic activity at the beginning of this year quite robust. While U.S. economic growth may slow later this year as international growth trends strengthen, the global economy should generally hold up well. Global GDP growth is expected to reach 2.9% in 2024, only slightly lower than the 3.0% forecast for global GDP growth in 2023.
So far, most G10 central banks remain on the sidelines in 2024. While the Bank of Japan (raising rates) and the Swiss National Bank (cutting rates) took action in the first quarter, most major central banks are not expected to start lowering policy rates until June or later. The divergence in monetary policy is most pronounced in emerging markets, where central banks in Latin America and Europe, the Middle East and Africa continue to ease monetary policy, while central banks in Asia are on hold. We continue to believe that central banks in developing countries will continue to cut interest rates, albeit at a more cautious pace.
The resilience of the U.S. economy and increases in Federal Reserve policy rates supported the dollar in early 2024. Longer term, we still expect the dollar to depreciate as the outperformance of the U.S. economy fades. Additionally, we believe that as the Fed cuts interest rates, coupled with a soft landing for the U.S. economy and relatively better financial market conditions, the U.S. dollar should maintain an overall downward trend against many G10 and emerging market currencies until mid-2025. .
