US | US Dollar to regain some luster in 2021

While many commentators have been calling for a US dollar collapse, we believe the greenback will have a lot of staying power in 2021. In the wake of
extra-ordinary fiscal stimulus, favorable growth and interest rate differentials
should support a 3% year-over-year dollar appreciation by December 2021.

What you will learn about:

• After a predictable appreciation on safe haven flows and US dollar liquidity shortages in the early phase of the Covid crisis, the dollar fell back appreciably against emerging markets and advanced economies’ currencies.
• This unwind reflected less favorable growth and monetary policy differentials, along with reduced political uncertainty after the presidential election and a risk-on trade.
• We believe the third Covid phase will be one of nuance for the US dollar.