Financial and other markets still cannot decide what they really think about the US dollar. The currency was counted out several times and then it was revived again.
During the pandemic peak, investors’ attitude to the greenback has been rapidly changing. In fact, the US dollar managed to lose its status as the main reserve currency and won the title of the best safe-haven asset, according to specialists at Morgan Stanley.
However, the recent forecasts show that the US dollar may nosedive soon. Economists came to such a conclusion comparing the currency market situation in 1985 and 2002.
Then, a sharp shift in the Fed’s monetary policy caused smaller volumes of foreign investments and the greenback’s depreciation. Nowadays, the Fed’s actions and a failure of the White House to contain the coronavirus spread may lead to the already known consequences.
Regulators from all over the world cut their interest rates to record lows. Thus, investors will hardly pump money into US assets having much more lucrative offers.
As a result, a long-term bullish trend at the beginning of the summer was replaced by the bearish one. According to the June report, the number of deals against the greenback exceeded the number of deals in favor of it for the first time in many years.
