By Marko Vidrih on The Capital
The US dollar may collapse by a third in 2021, said economist Stephen Roach.
Roach is the former head of Morgan Stanley Asia, and now a senior fellow at the Jackson Institute of International Relations.
“The collapse of the dollar is quite possible in the near future,” he said the other day.
The economist explained that the exchange rate is a relative price reflecting the economic, financial, social and political condition of a country compared to other states.
The dollar exchange rate of 72% is determined by the exchange rate of the main trading partners of the United States-China, the European Union, Mexico, Canada and Japan.
Roach expressed the opinion that in 2021 their significant strengthening is very likely. The appreciation of the renminbi is inevitable as a result of China’s reorientation to domestic consumption due to the COVID-19 coronavirus pandemic, the euro’s prospects improved after the anti-crisis fund was created to deal with the effects of the pandemic, the Mexican peso and the Canadian dollar also strengthened significantly.
For this reason, in 2021, the dollar may fall to the lows of 2011, which now exceeds 33%.
Author: Marko Vidrih
Featured image credit: Unsplash
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