FX.co ★ EUR/USD: time to exchange dollars to euros?

Experts predicted that a sharp fall of the American currency by 36% against the euro may happen in 2021.

The US currency has lost approximately 11% from its peak in 2020 against a basket of major currencies. Hedge fund rates against the dollar hit a record high in ten years. Besides, traders often bet on the US dollar fall.

At the beginning of the year, the dollar exchange rate was 1.12 per euro, and now it is already 1.18.

Despite low-interest rates, stimulus to mitigate the COVID-19 consequences, unprecedented money printing, the US economy continues falling. In this regard, analysts say that the depreciation of the American currency is inevitable. Goldman Sachs analysts estimate that in 2023 one euro will cost $1.3.

Others, however, believe that the American currency will find support if the US economy improves. And BlackRock experts are confident that the US dollar will be able to avoid its collapse, as the world depends on the American currency. Nevertheless, rates of the euro and the US dollar will fluctuate slightly. Economists believe that the market will stabilize in the near future, despite the existing financial risks.

Others believe that sharp fluctuations in the currency will occur in autumn, especially after the presidential elections in America. Experts explain that a strong euro harms the export-oriented economy of the EU. Products made in the European Union are getting more expensive for American customers.

Moreover, the second wave of coronavirus is beginning in the eurozone, which could lead to a deeper crisis. Naturally, there is a risk of the euro collapse.

However, it is more likely that the American currency will continue to depreciate as the economic situation in the US is dire. Experts believe that the greenback will rise in price as means of payment, storage, funding, and exchange due to measures of stimulating the US economy. As a result, investors may lose interest in the US dollar and switch to other currencies.

Is it reasonable to exchange dollars to euros? There is a difference of opinion between the experts. Both currencies are global and have the same risk exposure. Therefore, experts advise keeping funds in both the US dollars and the euros. Also, you may use the currencies of other countries, as well as purchase gold coins. If you choose other currencies, you should take a closer look at the Swiss franc, as experts advise.