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Don’t overplay the dollar’s decline in 2021, Britain’s priority, and more

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Don’t overplay the dollar’s decline in 2021, Britain’s priority, and more



Latest opinion and analysis from OMFIF around the world

4-8 January 2021, Vol.12 Ed.1

Most-Read Commentary

Don’t overplay the dollar’s decline in 2021: Many observers are converging towards a highly downbeat 2021 outlook for the dollar. This view is at times associated with a surging risk appetite, the end of a strong dollar cycle or a twin deficit crash. Given the seeming random walk nature of exchange rates, forecasting the dollar’s 2021 outlook could be an act of hubris. That said, the dollar may indeed fall this year, but an overly negative narrative is unwarranted. Many arguments for a future slump don’t hold up, writes Mark Sobel.

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Year in review: Join Ellie Groves, deputy head of programming and Europe manager, and Danae Kyriakopoulou, chief economist and director of research at OMFIF, as they discuss the impact of Covid-19 and actions taken by central banks, the European Union and finance ministries. They also cover future challenges, including technological innovation and geopolitical shifts. 

Britain’s priority: UK GDP growth was outperforming the euro area’s anaemic outturn until the Brexit referendum. Now that the EU and UK have sealed a post-Brexit trade deal, rebuilding economic dynamism after a severe Covid hit will be easier said than done. If UK efforts succeed, it may provide the EU with useful competition, writes David Marsh. 
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Sovereigns test long end of the curve: If 2020 was a borrowing binge, 2021 is lined up to be a refinancing one, with central banks venturing further up the yield curve. Moving up the curve gives them more buying room, which they will need as asset purchases continue into 2021, write Chris Papadopoullos and Natalia Ospina. 
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Canada, the Americas and the global economy: Jean-François Perrault, senior vice-president and chief economist at Scotiabank, joins David Marsh, chairman at OMFIF, and William White, former deputy governor, Bank of Canada, in a recap of Scotiabank’s Global Insights Conference discussing the world economy and 2021 outlook. Watch

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