Beyond Simple Decline: Mean Reversion Patterns and the Long-term Future of the US Dollar

This thesis examines the future trajectory of the US dollar, investigating whether it is likely to experience long-term decline in value or display other relationships such as mean-reverting patterns with other currencies. Through rigorous empirical analysis of historical exchange rate data, economic indicators, and expert opinions, this research develops a comprehensive framework for predicting potential US dollar decline. The findings suggest that while the US dollar exhibits some mean-reverting tendencies in the short to medium term, structural economic factors point toward a gradual, managed decline in its international role and relative value over the long term. This decline is expected to be punctuated by periods of counter-cyclical strength during global economic uncertainty, reflecting the complex interplay of factors affecting currency valuation.