markets & strategies
Although there may be a volatile period for the US dollar in the short term, it looks set to decline further in the medium term, according to research by Standard Life Investments, the asset management arm of Standard Life Assurance.
According to Standard Life, the dollar has now reached fair value against the euro. However, looking beyond the possibility of short-term volatility, the underlying conditions of the market suggest the US dollar will continue to decline until it is clear to investors that the policymakers have been successful in re-inflating the global economy.
Ken Forman, global investment strategist at Standard Life Investments, said: 'The dollar has been in a clear downtrend for 18 months.
'First, the policies of the respective central banks have diverged sharply. Second, an apparent change in the rhetoric of US policymakers has led the market to perceive that the American authorities' policy on the dollar has shifted to one of benign neglect.'
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