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The U.S Dollar Is On The Blink Of A Massive Financial Downfall Thanks To The Coronavirus Pandemic

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A decade ago, the US dollar posted what was then termed as the biggest weekly decline. The world markets are yet to gain full recovery from the 2008 financial crisis where the dollar dropped by 9% as a result of falling stocks and debt markets.

However, the current global coronavirus pandemic has presented another threat to the strength of the world’s most liquid currency. The approval and the release of a US$2.2 trillion by the United States House of Representatives aims to fortify the dollar’s defense against the economic threat caused by the threat of the coronavirus pandemic. The stimulus package is the highest in American history and it’s aimed at helping people and businesses get through the economic afflictions resulting from the coronavirus epidemic.

The coronavirus plague is indeed a disruption to the dollar markets

Over the years, there has been a progressive though fragile demand and supply balance in dollar markets. The dollar has played a significant role in international transactions. Increased overseas demand between March and November of 2008 made the dollar skyrocket to 24% and in the recent past, the rates of the money market have also risen.

“There are simply not enough dollars going to the outside world at this critical juncture,” stated fund managers Ariel Bezalel and Harry Richards from Jupiter Asset Management.

There is so much uncertainty surrounding the demand and supply of the US dollar especially with the markets facing so much economic pressure due to the coronavirus pandemic. The government is still pumping more money into the economy and the current situation will likely continue indefinitely. At the same time multinationals and individuals are having a hard time staying afloat as they try to reserve their cash.

Despite the economic fallout, some analysts such as Stephen Jen, a former Morgan Stanley strategist remain optimistic. Jen believes that the US economy has the potential will likely achieve full recovery before the end of 2020.

The U.S is one of the strongest economies in the world but it has had its fair share of economic mistakes. However, it is those mistakes that have allowed them to learn how to steer the economy towards the right direction and that is why Jen is optimistic economic recovery.

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