The US dollar could severely depreciate against the euro by 2024, says forex analyst Ulf Lindahl, chief executive officer of A.G. Bisset Associates. He says the greenback is entering the cycle of losses.
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© Getty Images / Christopher Furlong

Since the 1970s, the US currency has been repeating a 15-year cycle of losses and gains, and the greenback has now entered the phase of declines, Lindahl said.

“When investors learn about the 15-year cycle, they are initially skeptical and doubt it exists,” the analyst said, as quoted by Bloomberg. If non-US investors don’t hedge against the dollar, they could face the “riskiest investment climate in 45 years,” Lindahl added.

The analyst predicts that the dollar will fall to $2 per euro and 75 yen per dollar by 2024, corresponding to 41 percent and 33 percent losses, respectively. Lindahl notes that the cycle of losses and gains is a usual pattern for economy, investors don’t see it when it concerns the dollar.

From the economic standpoint, Lindahl cites the following factors for the greenback’s decline: a likely slowdown in US economic growth that will result in a market slowdown, political turmoil, and the dollar’s overvaluation on a purchasing-power-parity basis against almost all major currencies.

The dollar has strengthened this year against the euro, trading at $1.1542 on Wednesday compared to $1.25 at the beginning of the year. The US currency has slightly weakened against the yen in the last 12 months.

 

 

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