Wall Street latest top consensus trade for 2021 has quickly emerged as a dollar short. After Deutsche Bank flip-flopped on its view for the dollar, first closing out its long-running dollar short then reversing itself just days later and renewing its USD short , other banks have joined the bandwagon expecting a major drop in the world’s reserve currency in the coming year.
In a Friday note from Goldman’s chief FX strategist Zach Pandal, he predicts that “depreciation in the broad Dollar can continue in 2021” and writes that his USD cross forecasts translate into a 6% decline in the broad trade-weighted Dollar index over the next 12 months, and a “sustained but orderly” 15% real depreciation from its 2020 peak to the end of 2024.
In fact, Goldman’s 12-month outlook on the dollar means that the bank sees the US currency being the worst performer in the coming year, while the Russian Ruble is expected to be the best currency in 2021, rising nearly 18%. …
But why only 20%? Inertia. Now that US foreign and economic policy has pretty much wrecked the petrodollar, the last prop for the dollar is dollar-based economic activity, which the covid scamdemic is very effectively targeting. But keep wearing your mask if slow suffocation makes you feel safer. Maybe you should write the word “slave” on it.