Published data on European price changes for European policymakers continues to be disappointing: According to the European Statistics Center, the average inflation rate in 19 eurozone countries in the twelve months to November was 0 percent. 1.1% decrease compared to the same figure leading to the previous month reached minus 0.3% to move the inflation rate further away from the 2% target set by the Central Bank of this region. At the EU level, the average rate was 0.2%, down 0.1% from the previous month.
Traders’ willingness to hold on to the dollar has declined sharply since the early months of 2020, and with advances in the corona and a more moderate government approach in the United States, more risky currencies are appealing to more traders. Has been. Although the dollar is not expected to fall freely, many foreign exchange market analysts believe that in the current situation there is room for further reversal of the dollar and that the dollar may remain in its current defensive stronghold until the first few months of 2021.
On the monetary policy side, the US Federal Reserve is expected to continue its current practice of keeping interest rates at one of the lowest levels in a decade. According to some financial experts, next year we will probably not see a significant change in the implementation of the Federal Reserve’s expansion policy.
The world economy is still under the influence of the corona, and as the United Nations Conference on Trade and Development predicts in a report, the average economic growth of the world countries this year will reach negative 5.6 percent, which, if realized, will be the worst performance since The financial crisis of 2009 is still considered. Although this report is still a disappointing report, it is a relative improvement over the previous negative 9% forecast. The United Nations has previously warned that some eight million people worldwide will be impoverished by the corona.
“In simple terms, the current value of the dollar is too much for traders, and that’s why I think the bad days of the dollar continue,” said Kate Jokis, a foreign exchange strategist at General Societe Bank. Markets are reacting to what is happening in monetary policy, and with the current situation, there is a lot of pressure on the dollar. Compared to the first months of the year, the attractiveness of the dollar for many traders has decreased.
The dollar index, which measures the exchange rate against a basket of world currencies, closed 0.14 percent lower at 89.83 today. The exchange rate of each Swiss franc was announced as $ 1.131 (the above rates are calculated according to the closing hours of trading in New York foreign exchange markets).