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.
USD in the markets
Growing fears of the coronavirus outbreak has moved the market into safer currencies such as the USD and away from AUD, NZD and CAD.
The US dollar held its value in 2019 despite a serious escalation in US-China trade tensions, mainly because the greenback is still considered a safer currency to own than most others.
At its October meeting the Federal Reserve cut the target range for the federal funds rate to 1.5-1.75 percent, the third rate cut so far this year, amid soft inflation indicators and general worries about the economy. However the central bank also signaled a pause in the easing cycle.
Taking the blame for the economic downturn is US President Donald Trump, whose trade war policies have set a ball rolling that could wipe $455bn from global output according to the IMF.
US dollar forecasts
Though US interest rates are expected to fall, the US dollar might not come down as far or as quickly as some believe because monetary policies are being eased all over the world, and because the dollar attracts safe haven inflows (there’s an absence of good dollar alternatives).
HSBC said to expect a stronger USD relative to the Australian dollar and New Zealand dollar, and against riskier emerging market currencies.
A June Reuters poll of analysts had EUR/USD at $1.17 by mid-2020.
USD/EUR – Historical Rates
|1 Day||+0.4%||0.9226||17 Feb 2020|
|7 Day||+1.1%||0.9159||11 Feb 2020|
|30 Day||+2.8%||0.9013||19 Jan 2020|
|3 Month||+2.6%||0.9027||20 Nov 2019|
|1 Year||+4.8%||0.8840||18 Feb 2019|
|5 Year||+5.3%||0.8798||19 Feb 2015|
|10 Year||+25.7%||0.7372||20 Feb 2010|
*For period to 18-Feb 21UTC when USD/EUR was 0.9263
You can also read our full Foreign Exchange Guide to the United States.
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