FX.co ★ Lawrence Summers: dollar still has room to rise

Lawrence Summers: dollar still has room to rise

Lawrence Summers: dollar still has room to rise

In the long-lasting war between the euro and the US dollar, the latter is likely to retain its dominance in the foreseeable future. The greenback has been showing a confident rise for a long time already. Although there are problems in both the US and European economies, the greenback turned out to be more resilient.

Former US Treasury Secretary Lawrence Summers has predicted a rosy future for the US currency. He supposes that the greenback will dominate the euro, manifesting an unprecedented increase. “It's remarkable that people were saying the dollar's day was past not very long ago given its current strength,” Summers said. He also emphasizes that this summer, the US dollar exceeded the euro’s price for the first time in the last 20 years. Lawrence Summers highlighted that the US had a “huge advantage” in not being dependent on “egregiously expensive foreign energy.” Since the start of the year, the greenback has grown by 11% against the national currencies of the US main trade partners. The appreciation was mainly driven by the Fed’s monetary policy tightening aimed at combating inflation. What is more, the ECB’s long-term refusal to raise interest rates also contributed to a more expensive dollar.

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