After moving sideways during the first half of 2023, the dollar continued its decline to end 2% down in 2023 (now
-11% from its October 2022 peak). In fact, it depreciated against almost every major DM currency except the
Japanese yen. After over 10 years of dollar strength, could this be the start of a new cycle? History suggests the dollar
tends to move in multi-year cycles, with long periods of weakness following extended periods of strength. Dollar
movements are driven by interest rate and growth differentials and sentiment in the short term, but by current
account balances over the long term.
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