Forecast: US-dollar may strengthen 4-fold

Forecast: US-dollar may strengthen 4-fold Report experts: Dollar index is likely to increase by 30%
October 18, 2017 15:26
Forecast: US-dollar may strengthen 4-fold

Baku. 18 October. REPORT.AZ/ US-dollar Index (DXY) began to rise again after hitting 91.01 points on September 8, the lowest level of the last 33 months.

Analytical Group of Report believes, dollar's index is expected to rise by 97 percent by the year end.

The US-dollar index (USDX) is a measure of the value of the US-dollar relative to the value of a basket of currencies of the 6 majority of the U.S.'s most significant trading partners.

They are Euro (EUR), 57.6%, Japanese yen (JPY) 13.6%, Pound sterling (GBP), 11.9%, Canadian dollar (CAD), 9.1%, Swedish krona (SEK), 4.2%, Swiss franc (CHF) 3.6% weight.

The USDX started in March 1973. At its start, the value of the US-dollar index was 100.000.

The dollar index which was 101 points at Donald Trump's inauguration day is now makes 93,5 points. The decline was about 7.4%. US-dollar index up to 103.82 points after the Trump's inauguration, reaching its peak of the last 14 years.

"Technical analysis shows that the dollar index will continue to rise in the long term if it does not drop below 80 points. It is assumed that the increase will be up to 121 points, i.e. 29% above the current level.

In this case, the dollar is projected to increase by 29% on average, compared with the currencies listed. This increase may be more or less than some currencies.

For example, an increase of 29% from the current level against euro, which is the main currency of the basket, will cause the USD/EUR rate to fall to about 0.83. That is, the dollar will be more expensive than the euro and will cost 1.20 euros. For comparison, currently euro costs $ 1.18, or 1 dollar equals to 0.85 EUR", analysts added.

If the dollar index's historical record reaches the level of 164.7 points, US-dollar will grow by an average of 76% compared to about 6 currencies. In that case, the USD/EUR rate may drop to 0.28: "So, 1 dollar may cost 3.57 EUR".

Notably, DXY index has since traded as high as 164.7200 in February 1985, and as low as 70.698 on March 16, 2008.

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