Forex analytics. The dollar has not forgotten about debts – ForexNews.PRO
If your account in the CME system didn’t help the US dollar, write it down! Greenback went on the counterattack for a while amid problems with the electronic trading mechanism, but you can’t get away from the foundation. Discrepancies in monetary policy, reduction of divergence in economic growth and undermining confidence in the greenback due to the policy of the White House will allow EURUSD to continue its rally. But that’s not all the bears’ problems.
The difficulties with Britain’s budget inevitably raise the question, could something like this happen in the United States? The national debt of Albion will reach 95% of GDP in 2025, and the budget deficit will reach 4.3%. For the USA, these figures are even higher – almost 100% and 7%. London is facing a trilemma: how to please creditors, voters and at the same time not harm the economy. Is Washington not in danger of this?
To a lesser extent. Firstly, Americans can afford to raise taxes, they are lower than those of the British. Secondly, the US is being saved by the demand for the dollar. It is where the assets of the world’s largest and most liquid securities markets are denominated. As long as the greenback retains the status of the main reserve asset, and trust in it remains at a high level, the United States is not afraid of Britain’s problems.
It is not surprising that the White House continues to talk about a strong dollar, although it secretly hopes for its weakening. At the same time, the compromised confidence in the US currency is playing a bad joke with the “bears” on the EURUSD. Good relationships with partners are required to ensure high demand for treasuries and stocks. However, tariffs hardly make these relations better. The freezing of Russia’s gold and foreign exchange reserves did not help the greenback either. It accelerated the processes of de-dollarization and diversification of reserves.
Significant budget and current account deficits require large-scale Treasury bond issues and increase the supply of US dollars. We are talking about a systemic long-term process of weakening the greenback, which is compounded by the risks of the Fed becoming a puppet of the White House. Donald Trump said that he has already chosen a new chairman of the Federal Reserve, and the markets have no doubt that he will be an ardent “dove” Kevin Hassett.
Washington will cut rates in contrast to Frankfurt. The ECB is happy with everything. Christine Lagarde said that rates are at the right level, and inflation has been brought under control. At the same time, the acceleration of consumer prices in Germany to 2.6% in November may give rise to rumors of a tightening of monetary policy. Fiscal incentives and expectations of higher selling prices increase the risks of higher CPI.
