The greenback is expected to remain weak in the long term

Market Leader informed

Analysts at UBS Global Asset Management believe that the greenback’s rate may remain below its average trade-weighted value during the next two or three years.

According to the specialists, this is likely to happen as the efforts of the Federal reserve to spur economic growth with low interest rates and asset purchases are dulled by the fact that US consumers and producers pay down their debts, reducing demand for credit that has a negative impact on the country’s economy.

Consumer credit in the United States was declining for 18 of the last 19 months – in August it lost 0.1% dropping to $2.4 trillion that is the least since February 2007.
As for the short term period, US dollar is likely to advance as investors overestimated the effect of the Fed’s quantitative-easing policy, claims an analyst of FBS brokerage company Elizabeth Belugina.

In addition, Elizabeth regards the next week elections in US Congress as one more important factor determining the further dynamics of the greenback. On what party wins depends what the measures will be conducted to increase growth. Too little stimulus here may make US currency weak in order to boost net exports in the United States.



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