Many people still cannot get why analysts are prophesying the doom of the US dollar. For instance, in Russia, the US currency regularly updates new record highs and remains the most popular asset among the population. Why are there so many predictions about the US dollar’s demise?
To start with, experts have already dubbed the time of Donald Trump’s presidency "the prolonged period of a weak dollar". Although during this time, the greenback soared up considerably against almost all the currencies of emerging markets. Nevertheless, Trump's tax reform, rising budget deficits, and several rounds of Fed’s interest rate cuts pushed the US dollar lower. Currently, market experts are waiting for the reaction of the US national currency to the victory of the Democratic nominee, Joe Biden. Therefore, their opinions about the future of the US dollar are polarized. Some suggest that the currency will weaken even more. Biden is likely to adopt more stimulus measures to mitigate the negative consequences of the coronavirus crisis for ordinary citizens and small businesses. Others believe that the greenback will develop a dazzling rally. Biden is highly likely to warm up trade relations with Europe, Mexico, and Canada and lift some of the introduced tariffs. Such a shift in trade policy is sure to be bullish for the US dollar.
Furthermore, the US currency remains a safe-haven asset and a profitable investment in times of market turmoil. Besides, while the entire world is still recovering from the pandemic, the US economy has recently shown explosive growth.
