Dollar, Euro and Bitcoin predictions for 2021
Many people, from professional analysts to novice traders, are trying to imagine the possible future of the market. Quite often predictions are announced at the beginning of the year, and 2021 was no exception. Forex.ee has collected for you the most realistic predictions for the new year for top assets.
• Should we expect the US dollar collapse?
The US national currency kicked off the new year with a weak start as expectations for a global economic recovery bolstered demand for riskier assets. On the first business day of 2021, the dollar index fell to its lowest level for the last 3 years, and the euro rose as much as 0.7% against the dollar toward a high last seen within 2 years. Market sentiment is improving as concerns over the accelerating spread of the coronavirus are brushed aside and vaccines are rolled out.
However, expert opinions about the future of the US Dollar vary: some analysts say it is more likely to see the tendency towards a weaker dollar because of the Federal Reserve monetary policy, while others assume that Biden will not interfere the regulator's activities as much as Donald Trump did, and will not put pressure on the Fed to ease the policy. However, even the President's non-intervention will not strengthen the currency, it will continue to weaken, at least in the first half of the year due to the Federal Reserve's asset purchases of $120 billion per month. And this number may be increased after a new stimulus package adoption. And unplanned and significant shock events can make a huge amount of difference.
• What will happen to euro? The European economy will begin to recover from the crisis as the pandemic recedes and restrictions are weakened, and the ECB's softened policy will also contribute to this. European currency will keep up its advantage over the dollar due to the interest rates difference: the rate is above zero in the eurozone, while in the USA it is below zero. The experience of previous years shows that euro is showing a tendency to strengthen with growing demand for risk in the markets.
• What about Bitcoin? The world’s first cryptocurrency started 2021 with a new breakneck growth. Within a few days its price increased by 20%, and reached another historical record of $40 thousand. Opinion is split over whether Bitcoin could replace gold as a safe haven asset. Today, most experts expect further records from the cryptocurrency throughout this year. The most optimistic ones predict the price ahead of $100 thousand for one Bitcoin. And the pace of Bitcoin growth is stimulated by a rapidly weakening dollar, which suggests further growth of the asset. It is notable that in terms of its capitalization, Bitcoin almost caught up with Tesla. Now the cryptocurrency capitalization is $640 billion, which is only $30 billion less than Elon Musk's company.
• What to expect from the Central Bank? Most experts agree that in 2021 banks will proceed an ultra-easy monetary policy. Bloomberg’s quarterly review of monetary policy says that no major western central banks are expected to hike interest rates this year. The assumption is that regulators first want to guarantee the economic recovery is safe before they even start to consider tightening policy.
• What do the “stars” say?
It is interesting that astrologers also make their predictions for financial well-being. Thus, experts in the "stars" say that the near future will be financially controversial, since now the planet is in the last wave of financial growth, and in the near future there will be a downturn. Waves of tension are expected in February and April-May.
Whether to believe the stars, technical indicators or market analysts is up to you, of course. One thing is for sure – in 2021 you can implement any trading strategies with more than 100 trading assets on ECN/STP accounts with a reliable broker
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