The dollar fell for the first time in three consecutive trading days, atusing gains. This is due to optimism about an agreement between the European Union and the United Kingdom to organize future relations after the island kingdom leaves the Union for good.
The US dollar has also not been helped by the proximity of the approval of a fiscal package that should help the world’s strongest economy. Although the UK and the European Union are most likely to enter 2021 without a deal, it is not out of the question that it will be achieved in the relatively short time after the New Year.
The dollar index fell 10 percent against other currencies. But the euro gained as much as 0.2 percent against the dollar. The dollar has lost more than six percent of its value so far in 2020. Above all, it is not helped by the Federal Reserve’s extraordinarily relaxed policy, which causes an unprecedented amount of additional currency to enter the financial system. It is estimated that of the total increase in money supply, it accounts for almost 40 percent just for this year. And the Fed’s loose monetary policy is likely to continue for at least the first few months of 2021, so pressure on the dollar is unlikely to weaken.