FXStreet reports that economists at Westpac have extended the scale of the USD downtrend from a further 2% to around 5% as the effect of vaccines and the stance of policy argue for a sustained USD depreciation. 

“This decisive scientifi c success will speed the elimination of downside risks, most notably in Europe and the US, and also improves the likely scale of recovery around the globe.”

“Short and medium-to-long term interest rates are therefore set to remain at historically-low levels as far as the eye can see.”

“As the opening-up of the global economy erases concerns over downside risks, investors will look for new opportunities for profit. Many will be outside the US and Europe.”

“On both a financial and real investment basis then, we see strong justification to extend the forecast decline in the US dollar index from a further 2% to almost 5%. This revised forecast will see the DXY index down to around 86.8 by mid-2022.”