Experts point out two currencies which could challenge the US dollar’s status as a safe-haven asset. Analysts predict that investors will shift focus away from the US dollar towards other currencies. The Australian dollar and the Norwegian krone will win the most favor with investors.
The US currency is set to retreat across the board in the near future. Analysts link broad-based weakness of the greenback to the season of the mass vaccination against COVID-19. Once the green shoots of recovery emerge worldwide, this will boost the appetite for riskier assets. The global risk-on mood will encourage demand for commodity-linked currencies. The Australian dollar and the Norwegian krone will benefit the most from a revival in the global trade, analysts at Citigroup account for their outlook. Another argument for the krone’s strength is the hawkish forward guidance of the Norges Bank. The regulator is ready for aggressive monetary policy. At present, the krone’s forex rate is much undervalued. So, the currency has prospects for further growth. Citigroup advises traders to go long on the Australian dollar for the same reasons.
