Financial encyclopedia

In 2024, the global foreign exchange market changed rapidly and experienced multiple challenges and opportunities! Global economic instability, the US presidential election and the adjustment of monetary policies of major central banks have become the main factors driving the fluctuation of foreign exchange markets. Here are some highlights of this year's foreign exchange market:

Dollar: a year of ups and downs

The dollar performed repeatedly in 2024. At the beginning of the year, the dollar weakened against major currencies because the market expected the Fed to end the interest rate hike cycle and start to cut interest rates. However, with the election results settled, investors were optimistic about the possible protectionist policies adopted by the new government, and the dollar rebounded again at the end of the year, showing its strength.

Sterling: Steady progress.

With the support of the Bank of England's patient and prudent monetary policy, the pound performed well throughout the year. Although the market expected to cut interest rates, the stability of the British economic fundamentals and the market's confidence in it kept the pound relatively strong.

Euro: Faced with Multiple Pressures

The euro experienced a year full of resistance in 2024. The European Central Bank adopted a radical easing policy, which further widened the spread with the US dollar and the British pound, putting pressure on the exchange rate of the euro. At the same time, the euro zone's high dependence on global trade has made the uncertainty of US trade policy a major concern, and the euro was further under pressure at the end of the year.

Yen: mixed.

The Bank of Japan raised its benchmark interest rate to 0.25% in 2024, a record high since 2008, providing much-needed support for the yen. However, concerns about the potential trade policy of the United States have limited the rising space of the yen, causing its annual performance to fluctuate.

Commodity market: gold and silver are prominent, and oil is depressed.

Precious metals such as gold and silver were particularly eye-catching in 2024, with increases of over 30% and 35% respectively, mainly supported by geopolitical tensions and economic uncertainties. At the same time, due to weak demand and oversupply, the oil market continues to be depressed and has become a major anomaly in the market.

In 2024, the foreign exchange market showed extraordinary volatility in the context of global economic and political turmoil. Looking forward to 2025, with the further adjustment of monetary policies of major central banks and the continuous influence of geopolitical variables, investors need to maintain a high degree of flexibility and keep close to market dynamics to seize new opportunities!