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The dollar is expected to fall rapidly in the near future

Economy
02.01.2020
52
The dollar is expected to fall rapidly in the near future

 Within the peace talks in the trade war between China and the United States, the dollar began to lose ground. Also, a significant role was played by FRS rate cuts. Analysts say this is just the start of a weakening.

     Bloomberg Dollar Spot, an indicator that tracks the rate in relation to ten major exchange rates, in December fell by 2%, which was the maximum decline in the last couple of years. Despite the strengthening of the dollar in 2018, it has never reached the maximum mark of the beginning of 2017.

     It will fall in price, taking into consideration the start of negotiations between the US and China. This was indicated by ABN Amro Bank in its forecast. This will reduce interest in assets that are considered stable. Another reason for the decline in the value of the dollar is a soft policy of FRS, which has already managed to lower the rate three times to please the country’s economic development.

     Georgette Boyle, Chief Currency Analyst at ABN Amro Bank, is confident that the dollar held on thanks to the support of investors who considered it stable in 2019. But now, the weakening of the trade war has appeared on the horizon. Jim Leaviss, Head of M&G Investments Debt Management, suggested that FRS lowers rates, which will negatively impact the dollar. Also, before the presidential election, FRS is likely to be influenced to support economic growth.

     One way or another, there are analysts who are not dismissing dollar. Citigroup economists are confident that the currency will strengthen against the euro and the Canadian dollar, as the US economy will continue to outperform other countries. Representatives of Goldman Sachs say that the dollar will continue to decline only if the euro and Chinese yuan soar.

Author:Елена
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