Forecasts for the US dollar change all the time, affected by news events and relative sentiment towards the US economy. This continually updated article reviews the latest forecasts from banks and FX experts as well as news and recent movements of USD in the currency markets.
Key fundamentals that previously propped up the USD (such as company revenues, inflation rates and interest rates) have been rapidly eroded. However, there are drivers for a temporary shift in risk demand for the US dollar. Nothing goes down in a straight line, and the US dollar might bounce before it continues its trend lower.
The US dollar has dropped steadily for the last 3 months against nearly all major currencies.
However, as reported by Bloomberg Aug 11, the shorting of the US dollar - betting that USD will continue to drop - is becoming a crowded trade and may backfire.
Bank of America predict that an early discovery of a vaccine against the coronavirus would be a positive for the US dollar. That's because Europe and Asia have a higher chance of fresh waves of infections the longer it takes for a vaccine to be found, a scenario that's bullish for the US dollar, read more at the Bloomberg report.
In July market USD forecasts started predicting US dollar weakness during the second half of 2020. This was triggered by the mid-July european leaders delivery a historic stimulus package which was seen by market commentators as positive for the euro and hence negative for US dollar.
In early May the continuing coronavirus pandemic and an associated possible re-escalation in the US-China trade tensions has moved the market into safer currencies such as the USD and JPY.
The US dollar held its value in 2019 despite the US-China trade tensions, mainly because the greenback is still considered a safer currency to own than most others.
You can also read our full Foreign Exchange Guide to the United states.
The following sections show a summary of bank forecasts for popular USD exchange rates that we have reviewed, you can view each forecast article for more details.
National Australia Bank (NAB) have revised upwards their Aussie dollar forecasts now expecting the AUD/USD rate at US80c by June 2022, up from their previous forecast of US75c.
For 2020, NAB sees the Australian dollar at US74c by year-end, up from a predicted US72c.
The bleak outlook in the US has added downward pressure on the world’s base currency and helped consolidate the Aussie dollars’ upturn. Although the Australian dollar has recently edged through the key 0.72 handle, a sustained move above this level has been hard to come by. Further uncertainty in the US could push the AUD through 0.72 US cents. August Currency Update
Read more about FX Broker and Bank analysts' predictions for AUD to USD future trends in our blog article AUD to USD Broker & Bank Forecasts.
The combination of an eroded US interest yield advantage, a broadly positive riskon mood and renewed euro demand, could be a catalyst to push the Canadian dollar along. The combination of an eroded US interest yield advantage, a broadly positive riskon mood and renewed euro demand, could be a catalyst to push the Canadian dollar along. August Currency Update
Read more about FX Broker and Bank analysts' predictions for USD to CAD future trends in our blog article USD to CAD Broker & Bank Forecasts.
Credit Agricole see the Euro hitting US1.20 by the end of 2020 due to a growing diversification away from the greenback and more positive news out of Europe.
The euro is currently a more appealing investment than the US dollar as fiscal support and COVID-19 containment open the door to a faster paced recovery than what is likely in the US. With current USD weakness and strong long-term prospects for the European Union, there is speculation that the euro could be a contender as the world’s new reserve currency. In the short term the euro could be susceptible to swings, however in the longterm the euro has very good prospects. The currency is poised to move above 1.1850 and extend toward 1.20 in coming weeks. August Currency Update
Read more about FX Broker and Bank analysts' predictions for USD to EUR future trends in our blog article USD to EUR Broker & Bank Forecasts.
NAB have revised upwards their pound sterling forecasts now expecting the GBP/USD rate to be at US$1.47 by June 2022, up from their previous forecast of US$1.39. For 2020, it sees GBP at US$1.36 by year-end, up from a predicted US$1.30.
US dollar weakness has helped the embattled pound continue its recovery off June and early July lows. Despite this brief upturn, the outlook remains pessimistic as Brexit uncertainty and questions over the economy’s ability to rebound after the pandemic weigh on the currency. August Currency Update
Read more about FX Broker and Bank analysts' predictions for GBP to USD future trends in our blog article GBP to USD Broker & Bank Forecasts.
Goldman Sachs and RBC Capital forecast a large drop for US dollar against Japanese Yen to continue with a USD/JPY rate of 95 in the near future.
This is a difficult question and the answer really depends on many factors. The best way to consider an exchange rate’s current relative value is to look at the US dollar’s history against a range of currencies and in particular against the currency you are interested in exchanging it with.
For example, the following tables look at the change in the USD exchange rate to the present day for periods going back 10 years for popular USD exchange rates.
|06 Aug 2020 : 1.3320||0.8% ▼||1 Week|
|14 Jul 2020 : 1.3600||2.8% ▼||30 Days|
|15 May 2020 : 1.4111||6.3% ▼||90 Days|
|14 Aug 2019 : 1.3311||0.7% ▼||1 Year|
|15 Aug 2015 : 1.3086||1% ▲||5 Years|
|16 Aug 2010 : 1.0432||26.7% ▲||10 Years|
USD/CAD 10 year historic rates & change to 13-Aug-2020 : 1.3220
|06 Aug 2020 : 1.3830||1.1% ▲||1 Week|
|14 Jul 2020 : 1.4310||2.3% ▼||30 Days|
|15 May 2020 : 1.5589||10.3% ▼||90 Days|
|14 Aug 2019 : 1.4805||5.6% ▼||1 Year|
|15 Aug 2015 : 1.3552||3.2% ▲||5 Years|
|16 Aug 2010 : 1.1167||25.2% ▲||10 Years|
USD/AUD 10 year historic rates & change to 13-Aug-2020 : 1.3982
|06 Aug 2020 : 0.7612||0.5% ▲||1 Week|
|14 Jul 2020 : 0.7956||3.8% ▼||30 Days|
|15 May 2020 : 0.8260||7.4% ▼||90 Days|
|14 Aug 2019 : 0.8292||7.7% ▼||1 Year|
|15 Aug 2015 : 0.6391||19.7% ▲||5 Years|
|16 Aug 2010 : 0.6393||19.7% ▲||10 Years|
USD/GBP 10 year historic rates & change to 13-Aug-2020 : 0.7652
|06 Aug 2020 : 0.8421||0.5% ▲||1 Week|
|14 Jul 2020 : 0.8764||3.4% ▼||30 Days|
|15 May 2020 : 0.9241||8.4% ▼||90 Days|
|14 Aug 2019 : 0.8974||5.7% ▼||1 Year|
|15 Aug 2015 : 0.9001||6% ▼||5 Years|
|16 Aug 2010 : 0.7797||8.6% ▲||10 Years|
USD/EUR 10 year historic rates & change to 13-Aug-2020 : 0.8464