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%