The dollar is crumbling: what is the real culprit?

This week the USD continues to fall, and it's not a coincidence. There are five key factors that are pressuring its price:

1. The Fed changed the game Let's remember: high rates = strong dollar. But now the Federal Reserve is hinting at rate cuts, making Treasury bonds less attractive. Global investors are leaving.

2. December is historically weak for the USD DXY data (Dollar Index) confirms: in the last 40 years, December falls on average by 0.91%. U.S. corporations move cash abroad to optimize taxes, increasing demand for foreign currencies.

3. The world is recovering (and that is not good for the dollar) China, India, and the eurozone are showing signs of recovery. The euro is appreciating thanks to the ECB's firm stance against inflation. Less dominance of USD in the markets.

4. Investors are in “risk” mode With expectations of a “soft landing” and falling inflation, they are rushing towards more speculative assets. The dollar, being the safe haven, is losing its appeal.

5. Trade deficit + rising federal debt The U.S. continues to bleed money. This erodes confidence in the USD as a store of value.

And now what?

• The good: More competitive U.S. exports
• The bad: More expensive imports = inflationary pressure
• The unknown: Everything depends on how the global economy evolves in 2024

Analysts are divided. Some see more weakening, while others bet on a recovery due to the strength of Wall Street. The reality: the USD is at a geopolitical and macroeconomic crossroads.