Janet Yellen, who is preparing to become the 1st woman Secretary of the Treasury of the United States, pledged Tuesday before the Senate to return to a position of non-intervention on the level of the dollar, after the interventionist drift of Donald Trump.

Janet Yellen was being heard Tuesday before the U.S. Senate, which is expected to vote on her nomination as Joe Biden's Treasury Secretary. During this performance, held by videoconference from her home because of the coronavirus, the former head of the Federal Reserve pledged to return to the traditional position of the United States, namely non-intervention on the level of the dollar.

The greenback, which fell on Tuesday morning, reacted little after Ms. Yellen's remarks. The dollar index (which reflects its evolution against 6 reference currencies) fell Tuesday night by 0.28% to 90.51 points against this basket of currencies, while the euro gained 0.40% to $ 1.2125.

"I believe in exchange rates determined by the markets. The United States will not seek to weaken its currency for productivity gains," Yellen said. It has also made it firmly indicated that it will oppose any attempt by foreign countries to manipulate their own exchange rates.

The dollar has lost 8.6% since the beginning of the Covid-19 crisis

The new Treasury Secretary also named China as the main strategic competitor of the United States, stressing in particular the determination of the Joe Biden administration to crack down on Beijing's "abusive, unfair and illegal" practices.

Outgoing President Donald Trump broke with the tradition of non-intervention by regularly commenting on the level of the greenback, which he considered too high. Since the election of the Republican billionaire in November 2016, the price of the greenback has depreciated by more than 10%, and it has lost 8.6% since the beginning of March 2020, under the effect of ultra-accommodative monetary and fiscal policies in the United States to cope with the coronavirus crisis.

Conditions met for a capped dollar in 2021

Fundamentally, the dollar is expected to remain under pressure in the coming months, as the new $1.9 trillion Biden plan to fight the pandemic will derail the budget deficit and public spending, and thus weigh on the US dollar.

The Fed's persistently ultra-accommodative monetary policy, as well as the global economic recovery (which encourages US capital to invest abroad) should also prevent the greenback from appreciating this year. However, in the event of a correction in global financial markets, the greenback would serve as a safe haven, which would strengthen it at least temporarily.

The likely decline of the greenback should not exceed 2% this year, experts believe, except in the event of a deteriorating economic and health situation in the United States, which could shake market confidence in the dollar as a reference currency.