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February 25, 2021

Will the US dollar depreciate further as the global economy recovers?

Or will fiscal stimulus reverse that trend?
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In-house blogger
Guest blogger
Julius Probst
Application Specialist
All opinions expressed in this content are those of the contributor(s) and do not reflect the views of Macrobond Financial AB.
All written and electronic communication from Macrobond Financial AB is for information or marketing purposes and does not qualify as substantive research.

There was a time when shocks to the US economy would hit the dollar. But the opposite has been happening since the 2008 global financial crisis, when investors unexpectedly piled into the greenback as a safe haven – pushing its value higher than any other currency at the time.

As our chart shows, the correlation remains largely unchanged to this day – with the dollar appreciating whenever global manufacturing contracts or slows.

Now that the global economy is starting to recover, can we expect the dollar to further depreciate? Or will the government’s $1.9 trillion fiscal stimulus package finally reverse the trend?

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