American Dollar reports worst yearly plunge since 2017; Euro, Aussie rise over 9%

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American Dollar reports worst yearly plunge since 2017; Euro, Aussie rise over 9%

The American currency had clocked its steepest yearly plunge since 2017 on Thursday, winding up a year of a wave of tattering trepidations 6.77 per cent lower, as the currency’s safe-haven bid was spoiled followed by the release of a trillion-dollar pandemic stimulus bill back in the April of 2020, while optimisms over another large-scale Government stimulus during the end of 2020 had dented a US Dollar buying-spree by a substantial margin.

In point of fact, the pandemic-battered 2020 had witnessed a tumultuous year for the US Dollar, while the greenback rose to a three-year trough of 102.99 against a basket of six major currencies on an average in March, however, had wrapped up the year down by 6.77 per cent to 89.96, the index’s lowest level in more than two years and a half.

US Dollar posts worst yearly plunge since 2017

If truth is be told, a number of key fundamentals had slandered the US Dollar Index’s (DXY) safe-haven bid, while a sharply improving global economic outlook with China reporting its tenth straight month of growth in manufacturing activities in December, rollout of a raft of pandemic vaccine candidates alongside a bottlenecked benchmark interest rate, had poured fresh scorns on the greenback’s safe-haven bid.

Citing statistics, as the US Dollar Index (DXY) was jolted as much as 12.65 per cent from its March highs, the bloc’s single currency euro ended up the year at $1.2215, up by 8.97 per cent in 2020, while the risk-sensitive Aussie and Kiwi rose 9.76 per cent and 6.82 per cent respectively last year.

Besides, the safe-haven Japanese yen had wrapped up the year at 103.25 yen per dollar, up by just a notch shy of 5 per cent over the year, while the British pound rose nearly 3 per cent in the year to $1.3656 following a flurry of Brexit drama and the American currency shed 1.79 per cent to $1.2755 against its Canadian counterpart.

Meanwhile, citing a growing prospect of further depreciation of an American currency followed by the release of a $2.3 trillion fiscal package that would likely to ramp up inflation indicators, a Chief Investment Officer at Asset Manager Ravenscroft, Kevin Boscher wrote in a client note, “I expect the dollar to depreciate further over the next few years as the Fed keeps rates at zero whilst maintaining its bloated balance sheet.