The American economist, former Morgan Stanley Asia director, Stephen Roach, expressed his opinion in an article published on Bloomberg that the US dollar, which is weakening very strongly, will fall deeper by the end. year 2021.
Economists believe that in an unfavorable scenario, the value of the US currency could fall by up to 35%.
The economist emphasized that there were three factors that contributed to the collapse of the US currency, which are: the current account deficit in the US balance of payments surged; The strength of the euro; The US Federal Reserve does not want to intervene before any weakening of the dollar.
Roach also noted that the dollar’s position is complicated by the coronavirus pandemic and the economic situation is on the way of recession.
The economist notes that current conditions are forcing the US government to offer another significant package of economic assistance. This decision will have an impact on any economy.
|The US experts are unanimous that the dollar will decline sharply|
Previously, on January 22, US President Joe Biden said that the economic crisis in this country caused by the coronavirus pandemic is getting worse and worse, so drastic and urgent measures are needed.
On the same day, the head of the National Economic Council of the White House, Brian Dees, said that the US authorities must take urgent measures to stimulate the economy before the COVID- 19, if not later, there will be a way out “out of the hole even deeper”.
Previously, Bloomberg also quoted analysts of Citigroup, a financial group, predicting that the dollar would depreciate deeply for three reasons:
The first is that the coronavirus vaccine is widely circulated and helps restore global trade, economic growth, and revive the global economy. The second is the soft policy of the US Federal Reserve System that leads to low exchange rates, causing investors to be forced to sell off US assets in international markets. The third is the subsequent social conflicts in American society and the “underground civil war” between the two political parties of the United States.
According to analysts, the biggest risk for the dollar is that new President Joe Biden will continue the stimulus policy by pumping trillions of dollars to restore the US economy.
In addition to political instability, it is likely that forecasts of a depreciation of the US currency will come true, as the dollar will come under additional pressure.