Banks have predicted a fall in the dollar by 2021

The world's largest banks have predicted a fall in the dollar by 2021

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2020-07-13 13:26:00

The dollar is forecast to fall two percentage towards the Euro and three percent in opposition to the yen in the second half of the year. The Euro will exchange at the end of year at 1.10 to 1.16 dollars. The yen - Euro exchange rate will up from the current 107 yen per dollar to a 100-104 by the end of the fourth quarter.

The major motive is the gradual weakening of the dollar's attractiveness as a safe haven currency after a huge demand for it in March, whilst the worldwide economy experienced a shock. Thus, a representative of the Swiss holding company UBS Group AG noted that towards the historical past of lifting restrictions and restoring business activity, the dollar is falling down. But it's almost impossible to determine how the epidemic will develop.

In addition, some experts have decided that the improvement of the European Commission's economic recuperation plan, which involves joint borrowing below EU guarantees of 750 billion euros, has a good effect on the Euro alternate rate. According to the analyst of the American Corporation State Street, decisive actions by the European Central Bank (ECB), coupled with the Franco-German tandem, indicate that the Euro zone states are able to fast and successful respond to rising crises.

On the opposite hand, there's still disagreement among European nations about certain factors of the plan. A block of 4 countries — Austria, Denmark, the Netherlands and Sweden — opposes grants for the most affected countries and insists on lending. The arguable technique in turn puts pressure on the Euro.

According to the World Bank, the world financial system will reduce by 5.2 percentage this year, expected to be the worst recession since World War II. In a bad scenario, the reduction will be 8 percent.

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