China and Europe will return to ‘natural’ pre-crisis countries faster than the US, says President Bulut Bağcı of the World Tourism Forum Institute, as they were able to counter the spread of COVID 19 very effectively.

As a consequence, the USD is being devalued. With infection rates rising again since the reopening of the economy, the Fed will continue a prolonged war to cut rates. The almost full-capacity printing press contributes to a US dollar value erosion.

However, Bağcı adds: “Nevertheless, the lessons of the recent crisis can never be forgotten, demonstrating how connected the economies are in the global financial system.”

The USD and US markets lagged before July 2008 as a result of the pressure on the US economy by the subprime mortgage crisis. But strong demand for stocks and currencies on emerging markets resulted in a large sell-off against deleveraging by US banks.

Victorious ‘COVID warriors’ currencies will strengthen against the USD, given there is competition in high-yield assets on the markets. In March and September-October 2008, the deleveraging of volatile currencies can still fail – a change in the latest months’ patterns.

Under these circumstances, a bet on USD can only be justified by belief in global positive dynamics. Nonetheless, we expect that at the end of the recovery queue, the S&P 500 and USD will stay. However, if markets continue to fall, the US dollar will once again become the key option for investors who decided to take part in the most acute phase of this financial storm.