The US dollar’s rally that started during Barack Obama's second term is likely to be the longest period of dollar strength since Bill Clinton's presidency. Compared to President Clinton’s term, the greenback’s longer-term gains were recorded during the times of Reagan.
Experts forecast that the US currency will be higher against its major counterparts except the Canadian dollar, British pound and the Norwegian krone in 2016.
The New Zealand dollar, Australian dollar, and the Swiss franc will see the biggest declines in the range of 5.5%-8.0%. The Danish krone and Swedish krone will fall about 5%, the yen will lose around 3.5%, while the euro is seen to fall almost 3%.
The expected strengthening of the greenback is explained by the Fed’s decision to raise interest rates in mid-December 2015.
Economists say that the dollar had two biggest rallies since its peg to gold ended in 1971, from 1979 to 1984 when Ronald Reagan took office and in the last five years of economic upturn during Bill Clinton’s presidency.
The third dollar’s rally started in 2013 after the Fed began winding down its extraordinary monetary stimulus it introduced during the recession of 2007-2009. Interestingly, none of the previous rallies lasted less than four years so the imminent end of the current one should not be expected.
As for the Russian ruble, it declined to 73.63 against the dollar on MICEX during the last trading session of 2015, sinking to the lowest level since December 16, 2014 when it plunged to 80.1. In 2016 the ruble is expected to fall against the greenback below the levels reached in December 2014. For the serious consequences the dollar should rise above 90 rubles, experts say.
