Citigroup analysts project dollar weaknesses that could see it drop as much as 20% in 2021 if COVID-19 vaccines are widely distributed, according to Bloomberg. Pressure intensified on the dollar on Monday following the news that Moderna’s COVID-19 was effective, weighing on demand for havens like the greenback, yen, and Treasuries.
- Vaccine breakthroughs will see the global economy grow at a faster rate prompting the investors to rotate out of cash and U.S. assets and into international holdings
- Apart from vaccine breakthroughs, Citigroup expects the dollar to suffer from a dovish Fed when the global economy normalizes.
- The dollar has declined more than 11% from its peak in March.
The dollar index is currently declining. DXY is down 0.12%
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