The U.S. dollar is experiencing a once-in-a-generation rally!
The surge that threatens to aggravate a slowdown in growth and amplify inflation for global central banks.
Tweet on US dollar surge amid inflation
Dollar rise falters global recovery!
The U.S. dollar is experiencing a once-in-a-generation rally, a surge that threatens to aggravate a slowdown in growth and amplify inflation for global central banks, @wsj reportshttps://t.co/pzFb7Ekt0E
— The_Journalbiz (@the_journalbiz) September 19, 2022
The dollar’s role as the primary currency used in global trade and finance means its fluctuations have widespread impacts.
The currency’s strength is being felt in the fuel and food shortages in Sri Lanka, in Europe’s record inflation and in Japan’s exploding trade deficit.
This week, investors are closely watching the outcome of the Federal Reserve’s policy meeting for clues about the dollar’s trajectory.
The U.S. central bank is expected Wednesday to raise interest rates by at least 0.75 percentage point as it fights inflation—likely fueling further gains in the greenback.
Last week, the dollar steamrolled through a key level against the Chinese yuan, with one dollar buying more than 7 yuan for the first time since 2020.
Japanese officials, who had previously stood aside as the yen lost one-fifth of its value this year, began to fret publicly that markets were going too far.
The ICE U.S. Dollar Index, which measures the currency against a basket of its biggest trading partners, has risen more than 14% in 2022, on track for its best year since the index’s launch in 1985.
The euro, Japanese yen and British pound have fallen to multi-decade lows against the greenback. Emerging-market currencies have been battered:
The Egyptian pound has fallen 18%, the Hungarian forint is down 20% and the South African rand has lost 9.4%.