In the coming week, Brexit-related events will contribute to the weakening of the dollar, and, consequently, the growth of the major currencies. Britain is now forced to negotiate with the EU. Biden’s victory in the United States left Prime Minister Boris Johnson no choice; England can no longer count on an American trade agreement.
Negotiators are likely rushing to reach the EU summit to reach key agreements on controversial issues that could lift the pound and euro. They and major currencies could also rally on a weaker dollar, following Biden’s selection of Treasury Secretary.
The new president is able to return to the White House officials known for their dovish policy in the financial sphere. In this situation, the US dollar will face double weakening blows from the Fed and the government in the form of various stimulus programs.
The dollar could be strengthened by the positive test results of the American coronavirus vaccine, which will be announced this week. However, the degree of influence of this event on the current economic processes is not yet known. Therefore, taking into account the inertia of the processes, it can be assumed that the dollar will weaken for some time.