As recently as last spring, when the first wave of the coronavirus pandemic broke out, the US dollar served as a safe haven. And he seemed to stay with him for the rest of the year. But then the outbreak of the pandemic moved to the United States, and the coronavirus began to crush the American economy.
The Federal Reserve came up with an unprecedented stimulus package immediately after accepting restrictions that had an impact on the economy. His goal was to keep the hope that the world’s strongest economy would not fall into recession, but would start again after the pandemic had teemed. But pumping money into the financial system only led to the dollar weakening against major currencies.
As of March, the dollar index was at a three-year high against a basket of currencies at 102.99 points. It fell to just under 90 points before the end of the year. By 2020, the dollar had lost 6.77 percent of its value, down 12.65 percent from its March high.
Unfortunately, even expectations in 2021 do not sound favorable to the dollar. Keeping interest rates low by the US central bank, combined with a record budget and trade deficit, will be a challenge for the United States currency. “I expect the dollar to weaken for several more years,” Kevin Boscher of ravenscroft, an investment firm, told Reuters.