In its recently published External Sector Report, the International Monetary Fund noted that they have assessed the US dollar as likely overvalued by 8.2% with a range of 5.2% to 11.2% during 2020, as reported by Reuters.
Featured statements
“Combined global current account surpluses and deficits increased to 3.2% of world GDP in 2020 from 2.8% in 2019.”
“Global current account imbalances are expected to increase further in 2021 and then decline to around 2.5% of global GDP by 2025.”
“Larger Current Account Imbalances Driven by Covid Aid Spending in the United States and Advanced Countries; Trade Imbalances for Medical Products; Fall in Demand for Oil and Travel.”
“The staff assessed the euro as undervalued by about 1.8% for the euro area as a whole in 2020; for Germany, the euro was undervalued by about 9.2%.”
“The staff assessed the Chinese yuan as undervalued by 0.5% in 2020 with a range of -10.5% to + 9.5%.”
Market reaction
This report does not appear to have a significant impact on the performance of the USD against its rivals. At the time of writing, the US dollar index it was down 0.07% on the day at 92.03.
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