Last year, the dollar index fell by almost 10%, showing the worst result since 2017. Unpredictable U.S. trade policy, Donald Trump’s threats to impose duties against allies and criticism of the Federal Reserve System put pressure on the dollar, writes ProFinance.ru according to Thomson Reuters.
In the report of the agency ING says that at this stage the weakening of the dollar is rather temporary than fundamental. Analysis of the use of the dollar in global assets, liabilities, market turnover and transactions has not revealed signs of acceleration of the process of dedollarization.
However, private investors holding more than 80% of foreign assets in the US continue to invest. Thus, the dollar has only partially lost its safe haven status for investors.
The Fed’s independence is the foundation of global financial stability, and accusations of improper interest rate cuts may cause panic in the currency market, the agency writes.
ING estimates that the euro will reach $1.22 by the end of the year, at the current level of about $1.18.
