Goldman, Citi See Dollar Sliding 20%
Sooner than later with Biden with the progressive Democrats coming in with huge defcits giveaways to to save their voting base from revolting again but this time around it won't be white privilege B.S.
But if Goldman's forecast for a 6% drop in 2021 is aggressive, then Citi's prediction is outright bizarre: according to Citigroup FX strategist Calvin Tse, the dollar is likely to begin a drop of as much as 20% in 2021 should Covid-19 vaccines become widely distributed and help to revive global trade and economic growth.
Quoted by Bloomberg, Tse said that "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. Echoing Goldman, Citi said that the election was not ultimately the catalyst for a significant plunge, but Citigroup says the broad macroeconomic backdrop will be a bigger driver of the dollar going forward.
Citigroup expects that in addition to the impact from vaccine breakthroughs, the dollar will suffer as the Fed will remain dovish when the global economy normalizes, the rest of the world is likely to grow at a faster pace, and investors will rotate out of U.S. assets and into international assets, Bloomberg reported.
Most Wall Street strategists have been predicting for months that the U.S. election, vaccine breakthroughs and Federal Reserve policy could deal a serious blow to the currency.