Convera, a leading global B2B payments Fintech, today released its ‘Are You Ready For 2024’ report detailing its predictions for major shifts in currencies, trade, and the global economy next year. 

High interest rates and inflation remained the top macro concerns for businesses in 2023, but 2024 may look different as economies enter recession and central banks cut rates. Convera’s report analyzes the 2024 market outlook and reveals that it will be a challenging year as high interest rates, political uncertainty and FX concerns continue to impact global economic growth.

As upcoming elections edge closer in major economies like the US, EU, and UK, campaign promises and election outcomes are predicted to shift economic policies. Historically, elections have caused currency fluctuations as markets react. With diverging monetary policies, currency valuations could see greater volatility in 2024.

The report also predicts economic growth in 2024 to slow to just 1.95%, the lowest since the financial crisis. As the US is a primary engine of global GDP, its weakening economy will drag down worldwide growth. Slower growth impacts trade, corporate profits, lending, and FX volatility.

Other key highlights in the report include:

• Movement in Inflation Rates: Inflation is forecast to moderate in 2024 as economies enter recession. This could allow central banks to cut interest rates. However, differing approaches to rates across countries could reshape currency valuations and forex markets.

• Medium-term global trade growth: Global trade is projected to rapidly expand over the next 5 years despite near-term headwinds. Trade growth presents opportunities, but also risks if protectionism rises. With over 33% growth, trade flows and demand for cross-border payments will increase.

• FX: The US dollar may depreciate in 2024 as markets expect the Fed to cut rates amid a US recession. This influences currency markets, cross-border commerce, and dollar-denominated debt.

"After facing numerous economic headwinds, businesses view 2024 with cautious optimism even as significant changes loom that could impact trade, currencies and growth,” said Patrick Gauthier, CEO of Convera. “While inflation may moderate, shifts in central bank policies and election uncertainty will likely drive volatility. To capitalize on opportunities and mitigate risks, firms must prepare now for the complex landscape ahead.”

The report provides insight on how the impact of this global turbulence will be felt regionally:

• The US economy is expected to grow just 1.95% in 2024, which would be the slowest growth outside of a crisis period in the 21st century. A US recession in 2024 would drag down global growth. However, equity markets could gain if interest rate cuts boost sentiment.

• UK economic growth is forecast at just 0.4% in 2024 amid recession risks from high interest rates. Also, UK wage growth is expected to stay above the Bank of England's target rate in 2024, keeping inflation high.

• Australian GDP growth is forecast at just 1.5% in 2024, below the long-run average of 3.4%. Additionally, the AUD/USD exchange rate may remain below $0.70 in 2024, weighed down by slower Chinese growth, which will remain weak. 

With volatility forecast to continue in 2024, sophisticated currency hedging will remain a priority for executive agendas looking to sustain cross-border growth. Convera believes businesses with foreign exchange exposures should look for ways to manage the risks of FX fluctuations, with shifting markets expected to make foreign exchange transaction hedging vital for achieving ongoing success.

Convera produces the ‘Are You Ready For’ report as a guide to aid both customers and the industry as a whole in making smarter planning decisions for the year ahead. Convera’s customers range from small business owners and enterprise treasurers to educational institutions, financial institutions, law firms, and NGOs. Convera provides a diverse set of offerings from simple currency exchanges to sophisticated hedging solutions.

The full report is available to view here