Heated discussions on the short-term and medium-term prospects of the dollar do not subside. Experts are certain that the current year will be difficult for the greenback, but it is hard to say where the USD balance will go - in the direction of a long decline or gradual growth.
On Thursday, February 11, the dynamics of the "American" is close to the outsider. It remains near two-week lows, with varying success trying to grow. Market participants evaluate the current statistics on inflation in the United States, waiting for reports on the country's labor market. Recall that last month, consumer prices in the United States increased by 1.4% year-on-year, although experts expected inflation to accelerate to 1.5%.
Investors and traders compare the current data with the statements of Jerome Powell, the head of the Federal Reserve. During his speech, nothing new was mentioned, emphasizing the importance of restoring the labor market in the United States and stabilizing the national economy after COVID-19. The head of the Federal Reserve does not have hopes for high inflation, but is ready to resist its sharp rise. At the same time, the balance of the regulator will be replenished, the head of the Federal Reserve stressed. Most people have no illusions about the American labor market either. Many analysts expect a decrease in the number of applications for unemployment benefits compared to last week, which is in the range of 757 thousand.
The current situation drives the greenback under the pressure of negative factors, leaving almost no loopholes for growth. Many experts note the strengthening of the bearish trends in the dollar. Most currency pairs with USD have recently demonstrated a similar trend. On the morning of Thursday, February 11, the EUR / USD pair is trading near 1.2127–1.2128, trying to climb higher.
Experts wonder why the greenback is getting cheaper with declining inflation. The answer may be the fact that inflation is already embedded in the price of USD. Experts believe that the high probability of its growth is pushing the dollar down. According to the estimates of currency strategists at JPMorgan, in 2021, the greenback will face many heterogeneous factors that will significantly affect its dynamics. The COVID-19 pandemic has significantly worsened the US fiscal position, so the fundamentals of the USD have acquired a negative color, JPMorgan notes.
The bank's specialists believe that the reduction in the cost of the "American" is one of the ways to attract foreign capital to the United States, which is necessary to fill the double deficit in the country. Experts do not expect an active recovery of the US economy in the near future, but even in the case of a positive scenario, the dollar expects high volatility compared to other currencies.
