Baku. 14 November. REPORT.AZ/ USD/EUR currency pair declined to the level of 1.0773 which is the minimum level of the last 10 months.
Analytical Group of Report informs, on January 7 this year, the exchange rate was at 1.0769. The main reason for the decline is strengthening of the dollar in world currency market. Thus, the unexpected outcome of the US presidential election, caused short term shock in the financial markets and then an optimistic situation has established. Currently, in addition to historical level of stock indices, dollar has strengthened on contrary to analysts' forecasts. The strengthening of the dollar caused by high probability of raising interest rate by US Federal Reserve System (FRS) at the meeting in December. Thus, at pre-election platform of the newly elected president Donald Trump it is planned to increase public investment spending. This, in turn, means that the US government borrowings or interest rates will increase. Also, the strong growth of the US economy gives incentives to increase Fed's discount rate.
Report analysts believe USD/EUR rate will reach 1.0450 level by the end of the year and reach parity in the first half of 2017. Such a change will led other currencies of the world to the devaluation by 5-15%. So weakening of the euro will lead to a decrease in price of European goods in dollar equivalent that will cause devaluation of currencies of countries that have trade relations with Europe. As a result, the chain reaction will continue to spread the wave of devaluation.
Of course, in such a situation Azerbaijani manat will also continue to fall. Dollar exchange rate in the first half of next year can rise up to 2.50 AZN/USD. The experts don't rule out that US dollar rate can reach 2.50 AZN in first half 2017.