Dollar not to lose role of safe asset in near future

Dollar not to lose role of safe asset in near future

Azerbaijan, Baku, July 14 /Trend, A.Badalova/
The position of the U.S. dollar in relevant to European currencies will continue to grow despite the current fears regarding the U.S. announcement of a default in connection with non-rise in the upper threshold of public debts of the country.

"With the end of quantitative easing and continued uncertainties over the ability of eurozone leaders to fix the eurozone crisis, the dollar should appreciate towards the euro," Fredrik Erixon, Director of the European Centre for International Political Economy (ECIPE), wrote in an e-mail to Trend.
The positions of the U.S. dollar weakened in relevant to most currencies for already the two days. The cause for the fall in the U.S. dollar was a speech this week by the Chairman of U.S. Federal Reserve Ben Bernanke before the House of Commons, in which he sounded a hint of a possible continuation of the QE program in response to the continuing slow growth of the economy.
Today a negative impact on the dollar was made by the statement of Moody's that sent the highest ranking to U.S. - Aaa - for a review with possible reductions in connection with fears of not rising in the upper limit of public debts of the country by August 2.
Earlier, U.S. Treasury Secretary Timothy Geithner said that already on August 2 the U.S. will announce a default due to the fact that the Republicans do not want to increase the ceiling of the national debt.
Erixon said the White House and the U.S. Congress will find a way out of the current impasse over the debt ceiling.
If the U.S. cannot find a compromise over the debt ceiling, there will be very sharp consequences for the US as the centre for world financial markets, Erixon said.
"The dollar will take a big dive, and capital will shift into other currencies, pushing them upwards," said Erixon.
Adam S. Hersh, Economist at the Center For American Progress believes that the Euro will decline against the dollar in the second half of the year.
The European focus on fiscal contraction is undermining economic growth and making debt problems even more difficult to manage.
"As a result, investor capital will flow out of European assets and higher quality U.S. dollar assets, including Treasuries which will maintain their position as safe haven investments," Hersh wrote in an e-mail to Trend.
Hersh believes the real risk of not raising the debt ceiling is a severe contraction in aggregate demand if the government needs to stop paying social security checks to senior citizens, paying soldiers and veterans, and all the other services and investments government provides, and (2) a spike in interest rates that will make put financial stress on middle class families and make it harder for small businesses to borrow for investment.

Such a demand shock would undercut an already weakening economic recovery, and put the U.S. back into recession, Hersh said.

"Conservatives in Congress need to come around to raising the debt ceiling and then should focus on short-term measures to boost employment while keeping an eye on raising revenues and finding spending efficiencies to manage the long-term budget challenges," Hersh concluded.

Montenegro eases COVID-19 restrictive measures
Montenegro eases COVID-19 restrictive measures
Senior Hamas commander killed as Israel strikes Gaza, Palestinians fire rockets
Senior Hamas commander killed as Israel strikes Gaza, Palestinians fire rockets
Anti-Trump Cheney removed from House Republican leadership
Anti-Trump Cheney removed from House Republican leadership
Loading Bars
President Aliyev gets acquainted with conditions created in building, cottages of Khary Bulbul hotel
Azerbaijani president, first lady attend opening of Khary Bulbul hotel in Shusha after reconstruction (PHOTO)
Holiday prayers will be held in Yukhari Govharagha mosque tomorrow - President of Azerbaijan
I never seen city like Shusha elsewhere in world. There probably isn’t one - President of Azerbaijan
For all these years, we lived with one goal – to liberate our lands, says Azerbaijani president
Azerbaijani culture, prominent representatives of Azerbaijani culture returned to Shusha today - President Aliyev
Next year we will celebrate 270th anniversary of Shusha - President Aliyev
44-day war is our glorious history - Azerbaijani president
“Kharibulbul” festival will now be held in Shusha every year - President Aliyev
After long break, “Kharibulbul” festival being held in Jidir Duzu, we have been looking forward to this day for 30 years - President Aliyev
Montenegro eases COVID-19 restrictive measures
Senior Hamas commander killed as Israel strikes Gaza, Palestinians fire rockets
Anti-Trump Cheney removed from House Republican leadership
Transport Ministry shares data on ships received in southern Turkish port in 1Q2021
Ministry discloses volume of cargo from Israel handled by Turkish ports
Volume of cargo from Greece handled by Turkish ports revealed
Wix reports higher Q1 revenue, lower profit
BMW plans limited series hydrogen fuel cell SUV in 2022
Georgian economy expected to grow
Iran’s Bahar Azadi gold coin price continues to increase
More data needed before COVID-19 vaccine booster decisions - EU regulators
Azerbaijan shares data on number of vaccinated citizens for May 12
European Court of Human Rights to examine Convention violations by Armenia against Azerbaijan
Oil production volumes down in Kazakhstan
Bayati Shiraz mugham performed on Jidir Plain in Azerbaijan’s Shusha (VIDEO)
Deputy Governor of Iran’s Ilam Province talks about energy sector
Construction of Georgian Namakhvani HPP to be suspended
WB supports Georgian MSMEs and promotes digitalization of country’s economy
Azerbaijan confirms 558 more COVID-19 cases, 1,454 recoveries
Collection of notes of works by Azerbaijani composers prepared by Heydar Aliyev Foundation presented at Shusha Music Festival (PHOTO/VIDEO)
Iran discloses volume of bony fish caught in Caspian Sea
Kazakhstan's oil output below plan for 4M2021
Need to restore transport route to Azerbaijan’s Nakhchivan Autonomous Republic - obvious - Russian expert
Activities in Iran’s Bushehr Province increase
Turkey’s export of clothes to Azerbaijan up from January through April 2021
Turkmenistan, China to consider opportunities for developing co-o in number of areas
Iran to manufacture local equipment in drilling sector
Fuel costs in Georgia increase
I was thinking about architecture of new mosque in Shusha for almost few months - President Aliyev
There used to be 17 mosques in Shusha, hated enemy destroyed all of them - President Aliyev
Georgia reports 1,409 new cases of coronavirus for May 12
We returned to Shusha and we returned forever - President Aliyev
Business activity index slows down in Kazakhstan
Geostat reveals TOP-5 suppliers of oil in Georgia
Iran’s PMO declares data of cargo transportation in Bandar Lengeh Port
Turkey’s export of steel to Kazakhstan decreases
Iran reveals COVID-19 data for May 12
Azerbaijani president, first lady attend opening of “Kharibulbul” festival in Shusha
Trade ministry discloses volume of electrical goods exported by Turkey to Iran
Turkey’s export of cement to Turkmenistan down
President Ilham Aliyev visits restored “Khan gizi” spring in Shusha (PHOTO)
President Ilham Aliyev lays foundation stone for new mosque in Shusha (PHOTO)
President Ilham Aliyev and First Lady Mehriban Aliyeva are on visit to Shusha
French Development Agency to support economic dev't of Kazakhstan
Azerbaijan holds Kharibulbul music festival (VIDEO)
UAE to help Sudan secure all petroleum needs through flexible agreement
Similarweb completes NYSE IPO, at $1.6b valuation
Kazakhstan observes slowing down of food inflation
Azerbaijan’s export of plastics doubles
Turkey sees increase in export of cement to Iran
Russia reports over 8,200 daily COVID-19 cases
Norway will not use AstraZeneca COVID-19 vaccine
Turnaround timeframe at Kazakhstan's Kashagan field unveiled
Turkish airline companies to launch direct flights to Kazakhstan
Dostlug field to allow Turkmenistan to export natural gas to Western countries
Kazakhstan-Latvia trade plummets y-o-y
Refining volume remains practically unchanged in Kazakhstan
Gazelli Group standing beside Azerbaijani nation both in hard and good times (PHOTO)
Kazakhstan’s largest logistics terminal operator to buy fuel via tender
Iran plans to increase exports of non-oil products – Deputy Minister
Turkmenistan, Azerbaijan's SOCAR have huge potential for developing co-op
Kazakhstan boosts goods import from Afghanistan
Azerbaijani PM expresses condolences to Russian counterpart
Volume of loaded, unloaded cargo in Iran’s Shahid Bahonar port up
EIA increases forecast for oil extraction in Kazakhstan
Iran's trade turnover with EAEU member states announced
Baku to host Aerobic Gymnastics World Age Group Competitions for first time (VIDEO)
Kazakh KazMunayGas decreases oil transportation volumes y-o-y
Ex-president of Iran announces his candidacy for president
Oil climbs on solid demand outlook as market awaits fresh cues
Minister discloses Kazakhstan's GDP growth rate from January through April 2021
Trade turnover increased in Turkmenistan
Iranian Foreign Minister's begins visit to Middle East, Europe
Number of countries purchase products from Turkmenistan on exchange
Latest prices for Azerbaijani oil disclosed
EIB to invest in solar plant construction in Uzbekistan
Israeli energy pipeline hit in Gaza rocket attack
Turkmenistan exceeds plan for energy production
Wind market to be 30% weaker in 2021 y-o-y
California governor announces $12 billion homeless plan
First Vice-President Mehriban Aliyeva shared footages from her next visit to Karabakh with President Ilham Aliyev on her Instagram page (VIDEO)
Kazakh-Turkish JV launches tender to buy petrol
Iranian currency rates for May 12
Azerbaijan issues data on compulsory non-life insurance for March 2021
Japan, UNDP join efforts to boost oxygen supply in India's north-eastern region
Snam sees almost 6% increase in total revenues
India to get first round supplies from Hindu Temple of Abu Dhabi
Snam increases technical investment by 5%
Snam reveals TAP’s contribution to net income from equity investments
US looking to jointly produce Johnson & Johnson's single-dose Covid vaccine in India, talks on with SII
All news