According to a number of experts, the dollar will continue to remain strong, even though it may shortly give up a part of the euro position.
Since March 1, a ban on government loans comes into force in the United States. The so-called "public debt ceiling" was suspended last February as part of an agreement on the budget reached between Republicans and Democrats in Congress.
It is known that over the past year, the US Treasury took the record amount in the market since 2009 with $ 1.22 trillion and the country's total national debt exceeded $ 22 trillion. When the US Treasury actively attracts loans, dollar liquidity is withdrawn from the market. This creates a demand for the greenback from the large banks, which supports its rate. However, the situation may change in March, since the restriction on raising funds can deprive the dollar of this support.
It is assumed that the factor of raising the limit of US government debt for some time may weaken the position of the dollar against the euro by up to the level of 1.15.
At the same time, such fundamental factors and the difference in interest rates in the United States and Europe will continue to play against the euro while maintaining the current imbalance in the foreseeable future with risks sagging against the dollar below $1.12.
The material has been provided by InstaForex Company - www.instaforex.com