Vaccine implementation could cause U.S. dollar to fall 20 percent in 2021: Citibank

Vaccine implementation could cause U.S. dollar to fall 20 percent in 2021: Citibank

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Citibank announced on Monday that widespread vaccine distribution and ongoing monetary expansion to combat the corona virus outbreak could cause the US dollar = USD to weaken by up to 20% next year.

Will The Vaccine Catalyze The Next Drop For The Dollar?

“Once viable, widely distributed vaccines are released, we believe this will catalyze the next downtrend in the structural downtrend we expect,” the US bank said in a research note.:

"GIVEN THIS SET-UP, IN 2021, THE US DOLLAR WILL POTENTIALLY FALL BY UP TO 20%, WHILE THE DOLLAR'S LOSSES HAVE THE POTENTIAL TO SERIOUSLY AFFECT SECTORS.”

Moderna After Pfizer

Dec Monday, Moderna Inc stressed that the experimental vaccine was 94.5% effective in preventing COVID-19 based on interim data from a late-stage clinical trial. The announcement was the second in a week to report positive results. After Pfizer, Moderna also received positive data.

Citibank's bearish approach is based on claims that the US central bank will continue to adjust its policy settings even if inflation expectations rise as the economy recovers, thus allowing the US yield curve to get steeper.


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