Despite Bitcoin’s 12% Drop, Reuters Poll Suggests Massive Rally Is Coming

A short-term rebound in the U.S. dollar market is not guaranteed to continue over the longer term , at least according to the latest Reuters survey of fiat currencies.

The media mogul surveyed 75 strategists on their forward outlook for the dollar in 2021. Most of them said they expect the dollar to continue to fall as long as the Federal Reserve keeps its benchmark lending rate near zero . On top of that, the U.S. central bank's accommodative approach to inflation will increase the aforementioned downside risks.

“ The Fed’s policy actions are a major reason for the significant depreciation of the dollar over the last four or five months, ” Lee Hardman, currency economist at MUFG, told Reuters. “So they’ve basically cut rates to zero and that’s compressed the yield differentials in the U.S. versus the rest of the world and that’s obviously helped keep the dollar at such a strong level over the last few years and that’s no longer the case.”

Meanwhile, scarce assets like Bitcoin and gold pose a nemesis to the abundant dollar , with investors hedging against these perceived safe-haven assets as they risk losing the value of their savings due to rising consumer price indexes. The same sentiment has helped gold and Bitcoin prices rise exponentially from their mid-March lows.

The dollar’s ​​recent rebound is more technical than fundamental, a Reuters poll showed, with the result that would leave bitcoin on the same upside bias as it was before this week’s plunge.

The original article comes from bitcoinist and was translated by the Bluemountain Labs team. The English copyright belongs to the original author. Please contact the translator for Chinese reprint.