The dollar is likely to begin a drop of as much as 20 percent in 2021 should Covid-19 vaccines become widely distributed and help to revive global trade and economic growth, according to Citigroup Inc, Bloomberg reports.
Vaccine distribution, we believe, will check off all of our bear market signposts, allowing the dollar to follow a similar path to that it experienced from the early to mid-2000s when the currency started a multi-year downturn, Citigroup strategists including Calvin Tse wrote in a report.
The Bloomberg dollar index, which has fallen about 11 percent from its March peak, came under additional pressure Monday following news that Moderna Inc.’s Covid-19 vaccine was effective in a clinical trial, weighing on demand for havens like the greenback, the yen, and Treasuries.
Citigroup notes that in 2001, the catalyst that kicked off the multi-year downtrend in the greenback was China’s joining of the World Trade Organization. That ‘spurred a wave of globalization, pushing global trade volumes higher, leaving behind the closed US economy that had a much lower beta to global growth.’
NEWS.ru earlier reported that the US dollar exchange rate at the end of 2020 may reach 80–85 rubles, said Russian expert Mark Goikhman.