NEW YORK, Dec 20 Reuters The Federal Reserve39;s dovish December pivot has boosted the case for the weakening dollar to keep falling into 2024, though strength in the U.S. economy could limit the greenbacks decline.

After soaring to a twodecade high on the back of the Feds rate hikes in 2022, the U.S. currency has been largely rangebound this year on the back of resilient U.S. growth and the central bank39;s vow to keep borrowing costs elevated.

Last week39;s Fed meeting marked an unexpected shift, after Chairman Jerome Powell said the historic monetary policy tightening that brought rates to their highest level in decades was likely over, thanks to cooling inflation. Policymakers now project 75 basis points of cuts next year.

Falling rates are generally seen as a headwind for the dollar, making assets in the U.S. currency less attractive to yieldseeking investors. Though strategists had expected the dollar to weaken next year, a faster pace of rate cuts could accelerate the currency39;s decline.

Still, betting on a weaker dollar has been a perilous undertaking in recent years, and some investors are wary of jumping the gun. A U.S. economy that continues to outperform its peers could be one factor presenting an obstacle for bearish investors.

The Feds aggressive monetary policy tightening, along with postpandemic policies to boost U.S. growth, fueled the notion of American exceptionalism and delivered the most powerful dollar rally since the 1980s, said Kit Juckes,…