Reports out that Citigroup is predicting a 20% fall in the U.S. dollar, beginning next year. It doesn’t really state against which currencies though. However, it does predict AUD and Krone strength.
What are the implications of a fall in the USD for the NTD. I’m not so interested in the USD /NTD exchange rate more how a fall in the USD will affect NTD v other currencies such as GBP and the EURO. Does being relatively pegged to the USD also mean the NTD may fall? Also I expect the euro and Uk area to remain weak, so envisage any fall in the USD to be matched by those currencies, meaning very little overall change.
Although the spending levels the Dems are targeting for stimulus is going to push down the dollar because of the insane debt required to fund it, I just don’t see a 20% drop realistic.
Where will all the capital go?
The only currencies liquid enough to compete against the USD, namely the EUR and the GBP aren’t exactly in a great place either. Yen, maybe, as if Japan navigates RCEP and Trade War pt. 2. well it can emerge a victor. Other popular currencies like the AUD and CAD are tied to commodity prices which will probably stay compressed through most of '21.
I also don’t think we are going to see this drop because the equities/assets the world wants are in USD. All these big name IPOs and SPACs scheduled for 2021? USD!
As far as the NTD goes, there’s a de-facto trading band/peg in place to the USD. A weak USD and a strong NTD would be very bad in the long term.
I think we know that is the Central Bank’s stance, so the question is more about if and how a depreciating USD will affect the NTD against other currencies?
Don’t you get ripped off on the exchange rate by using an overseas debit card in the UK? Wouldn’t it be better to exchange a lot at a better rate and then pay for everything in cash?