Wells Fargo's remarkable dollar/TL forecast: It will fall

Wells Fargo also made analyses regarding exchange rates in its 2024 international economic outlook report. The bank believes that the dollar/TL exchange rate will decline starting from the second quarter of 2024. While it is assessed that there will be a moderate increase in the dollar/TL exchange rate in the coming periods despite analyses in the markets that the TL will gain value, Wells Fargo made a different comment. The bank also touched upon exchange rates in its 2024 international economic outlook report and predicted that the dollar/TL exchange rate will decline. The report prepared by the bank's economists Nick Bennenbroek, Brendan McKenna and Anna Stein on January 22 predicted that the dollar/TL exchange rate will rise to 31 in the first quarter of 2024 and fall to 30.50 in the second quarter of the year. The bank predicted that this momentum in the dollar/TL will continue in the following quarters. According to the report prepared by the bank, the exchange rate is expected to fall to 30 in the third quarter of the year and to 29.50 in the last quarter. The bank predicted that the exchange rate would be 29 in the first quarter of 2025 and 28.50 in the second quarter. The bank's global analysis of the dollar also drew attention to the estimate that the dollar would lose value in 2024. The bank's analysis suggests that the US dollar will generally continue to lose value as 2024 progresses. The bank's prominent statements in its analysis related to the dollar were as follows: Although we now expect the US to avoid a recession, we expect US growth to slow as the year progresses and the Fed to begin reducing interest rates as of the second quarter of this year. Indeed, an economic slowdown in the US could occur at a time when some major foreign economies are beginning to recover, creating a growth surge that would put pressure on the dollar. In addition, a soft landing scenario in the US economy, combined with progress in inflation and low US yields, could also support broader financial market sentiment and lend weight to "safe haven" support for the US dollar. Overall, we expect the US dollar to depreciate modestly against G10 and emerging market currencies as the year progresses.