FX.co ★ USD may collapse in 2021

Next year, the US dollar is expected to test its endurance. It is not a threat created by Iran, Russia or North Korea. It is a real forecast provided by Stephen Roach, a Senior Fellow at Yale University’s Jackson Institute of Global Affairs. For a long period of time, the US dollar has been the main global currency. Stephen Roach supposes that in 2021, the era of the US dollar's "exorbitant privilege" will come to an end. However, it does not mean that the greenback will disappear, lose its status of the main reserve currency or fall to zero levels. At the same time, there are reasons to say that the US dollar may drop by 35%. Such a slump could be provoked by Donald Trump's destructive policies, soaring budget deficit, and declining household savings. "Not only has he picked a needlessly destructive fight with China, he has also torn into the scaffolding of global organizations and alliances that have buttressed American influence for decades. Trump’s animosity seems driven by nationalism, but attacks like these only weaken the nation in the long run," the expert said.

Roach supposes that Donald Trump is destroying all alliances that have been supporting the US for decades. For example, Trump joined a global pile-on against the World Trade Organization and threatened to pull troops out of Germany. That is why the future of the US dollar is really gloomy.