Political and public health uncertainties, the U.S. Federal Reserves’ interest rate cuts, and recovering economies abroad while America’s remains hobbled are likely to continue to weaken the dollar, analysts say, making American goods cheaper overseas.
The dollar’s value slipped 0.4 percent in June and another 0.7 percent this month against a collection of six other major currencies.
The dollar’s value has dropped 6 percent from its mid-March peak, when foreign banks and investors were flocking to the dollar as a safe haven for value. Now foreign banks are cashing out of dollars as economies in Europe begin to revive and the COVID virus rampages across the U.S.
Recent data shows foreign banks holding $153 billion in loans from the U.S. Federal Reserve, compared to $449 billion on 27 May.
“The U.S. simply faces more risks than any other major economy at this point,” said Shahab Jalinoos, foreign exchange strategist at Credit Suisse.
TREND FORECAST: Again, and again, and again, the lower the dollar falls, the world’s safe-haven currency, the higher gold and silver prices will rise.
Trends are born, they grow, mature, reach old age, and die.
The “2020 Dollar Dive” has just been born.
