[ad_1]
The dollar will fall by 30% due to a huge deficit in the United States, according to billionaire investor Ray Daillou. This opinion is shared by several experts: JPMorgan Chase analysts, AG Bisset Associates LLC and others. And if such predictions were previously based on subjective assessments of each of the market players, the problems were now so obvious that even US President Donald Trump recognized them.
OBOZREVATEL answers the main questions about what is expected of the dollar and how it can affect the hryvnia.
Why talk about the "collapse" of the dollar?
US analysts are calling for several reasons for implementing the "worst for a dollar" scenario. The essential is reduced to an increase in the deficit, which in the current model is simply inevitable.
The first reason is the rigid actions of the regulator. The US Federal Reserve (the regulator, which performs the same function as the National Bank of Ukraine), has raised its discount rate three times this year. This means that the "cost" of money in the economy has increased, as the price of borrowing has increased. Trump has described these actions as "a major threat to the economy"
The second reason is the threat of loss of foreign buyers of US government obligations. Ray Dalio is convinced: the United States is immediately confronted with a "triple deficit", namely a deficit in the state budget, trade balance and current account. In this case, this may result in US government bonds no longer in demand. This will hit the US economy and lead to a fall in the dollar.
The third reason is the cyclical nature of the foreign exchange markets. In his report, AG Bisset Associates LLC CEO Ulf Lindall predicted a future slowdown caused by cyclical factors. Thus, Lindsay is convinced that he was able to detect the cyclical dependence of the dollar, which he described in the report. The financier has been studying the fluctuations of the US currency since 1970. It turned out that every 14-16 years there is a 35-48% rate drop. The new cycle of decline, said AG CEO Bisset Associates LLC, began last year and will end in six years. "The American" will then fall to the lowest point.
And the dollar will inevitably collapse?
No. It is possible that the situation will not change in the near future. Although the number of negative forecasts for the US currency is growing, no one can accurately predict the state of the economy, the consequences of the Fed's decision, and so on.
In their reports, the World Economic Forum and the IMF indicate possible risks for maintaining the stability of the dollar. a large part of the probability predicts that the US currency will not lose its positions in the near future.
And although the dollar remains the main reserve currency, other countries are not interested in its collapse.
What does the reserve currency mean?
Countries accumulate dollar reserves (not the exception and the NBU). The exploitation of gold does not have time for the development of countries, so the currency is used to store reserves.
The problem is that the United States was in a situation where it had to supply its currency with reserves from dozens of countries. Reserves increase, it is necessary to print more dollars, which inevitably leads to an increase in the deficit. An alternative to the dollar can be, for example, the euro. However, in order to prevent such a problem from recurring, the role of the reserve currency can be filled, for example, by special IMF borrowing rights (SDRs). The main condition – the new "money" reserve should not be tied to a specific country and to gold. Since there is not a single state or a precious metal, it can not easily meet the demand.
What will happen to the dollar exchange rate in Ukraine?
dollar
Ray Dalio thinks that the dollar will lose at least 30%. At the same time, AG Bisset Associates LLC CEO Ulf Lindal said in his report: the dollar will fall by 40% by 2024, commodity prices will rise and equities will start to sell. JPMorgan Chase has released a forecast that the dollar will start to be cheaper by the end of next year.
What will be its impact on Ukraine?
The more expensive the dollar, the stronger the hryvnia. That is, if the value of the US currency falls, the price of the Ukrainian could rise. However, one must also understand that the reserves of the NBU and dozens of other countries are in US dollars. The problems in the United States can be projected on the situation of world markets and affect negatively dozens of countries.
[ad_2]
Source link
