Top 2024 Currency Trends: Best Performing Foreign Exchange

In 2024, the foreign exchange (FX) market saw big changes. These changes happened because of shifts in monetary policy, decisions made by the central bank, economic growth, and geopolitical factors. Investors, policymakers, and businesses watched these trends closely. They wanted to understand the currency changes and how they affected the global economy.

What Were the Best Performing Currencies in 2024?

The best currencies in 2024 A were backed by strong economic growth, steady monetary policies, and high interest rates. The euro (EUR), Japanese yen (JPY), and Swiss franc (CHF) gained value. This was because of central bank policies, trust from investors, and rising foreign exchange reserves.

Which currencies performed the best in 2024?

Many currencies went up in value a lot against the US dollar (USD) and other major currencies in 2024.

Euro (EUR)

The euro (EUR) got stronger because the European Union (EU) provided more fiscal policy support and showed good signs of economic growth. The European Central Bank (ECB) kept a steady monetary policy, which made investors feel more confident.

Japanese Yen (JPY)

The Japanese yen (JPY) became stronger after the Bank of Japan (BoJ) stopped its negative interest rates policy. They also started interest rate hikes for the first time in several years. The yen gained from being a safe-haven currency during global market uncertainties.

Swiss Franc (CHF)

The Swiss franc (CHF) is still one of the strongest currencies in the FX market. The Swiss National Bank (SNB) kept high interest rates, and many people want this currency. This is because of the country’s political stability and a strong banking sector.

Swedish Krona (SEK)

The Swedish krona (SEK) got stronger as European growth improved. The Bank of Sweden changed its monetary policy to manage high inflation. A good performance in the industrial metals and technology sectors also helped make it strong.

Which currencies performed the worst in 2024?

Many currencies lost value because of political instability, high inflation, and low economic growth.

Lebanese Pound (LBP)

The Lebanese pound (LBP) is still one of the weakest currencies in the world. It faces challenges from high inflation, foreign debt, and a long-lasting banking crisis. The value of the pound is also affected by poor monetary policy decisions.

Iranian Rial (IRR)

The Iranian rial (IRR) kept losing value because of economic sanctions, low economic growth, and problems in the Middle East. These issues led to fewer foreign exchange reserves. This made it hard for the central bank to keep the currency steady.

Sierra Leonean Leone (SLL)

The Sierra Leonean leone (SLL) fell in value because of a weak economy, ongoing foreign debt issues, and poor international trade relations. The country’s gross domestic product (GDP) suffered due to rising prices.

Guinean Franc (GNF)

The Guinean franc (GNF) faced problems in 2024 because the country had economic issues. The foreign exchange market took a big hit from low foreign investment. Since the country depends heavily on commodity exports, it became weak against global economic downturns.

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How did central bank policies influence currency trends?

Federal Reserve (Fed)

The Federal Reserve (Fed) in the United States has kept interest rates high to manage inflation. Still, worries about slower economic growth and problems with the trade balance have caused exchange rate fluctuations for the US dollar (USD).

European Central Bank (ECB)

The ECB kept a careful monetary policy. This supported European growth and helped keep foreign exchange stable. As a result, the euro (EUR) became stronger. This also raised confidence in European markets.

Bank of Japan (BoJ)

For the first time in recent years, the Bank of Japan (BoJ) stopped its negative interest rates policy. It also allowed small increases in interest rates. This choice helped to slow down yen depreciation. It also drew institutional investors back to Japanese assets.

Bank of England (BoE)

The Bank of England (BoE) paid close attention to UK economic growth and labor market data. They kept a monetary policy that worked to control inflation and support financial stability. This strategy helped the British pound (GBP) stay stable even with issues in the real estate and commercial real estate markets.

What external factors influenced currency fluctuations in 2024?

Geopolitical Events

Political issues in the Middle East, especially in the Persian Gulf, have affected oil-exporting countries and their foreign exchange reserves. The areas around the South China Sea and Mediterranean Sea also saw more military unrest. This unrest impacted foreign assets and caused changes in exchange rates.

Trade Policies and Global Growth

Changes in international trade agreements and new fiscal policies affected how stable the currency market is. The US dollar (USD) experienced downward pressure because of increasing trade imbalances. On the other hand, countries with strong manufacturing sectors gained from a weaker dollar.

Commodity Prices and Energy Markets

Changes in oil prices and gas reserves affected the money used in both exporting and importing countries. Countries that export oil saw their exchange rates go up because of higher energy prices. On the other hand, countries that rely on imports faced more inflation.

How did currency trends impact investment strategies?

Hedge Funds and Institutional Investors

Institutional investors and hedge funds changed their investment portfolios based on trends in the foreign exchange market. Higher interest rates in Europe and Japan drew money away from the US dollar and into stronger currencies.

Asset Managers and Global Markets

Asset managers are spreading out their foreign assets. They are focusing on personalised financial plans to protect against the high risk of losing money in investments. The downward pressure on some currencies in developed markets has made investors look for alternative asset classes that have a better chance for growth.

Correct as of 17 March 2025

FAQs about Foreign Exchange Trends in 2024

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