I rate it weak1/17/2024 ![]() ![]() Since then, the USD has been steadily climbing higher to 103.80 in March 2020 as Covid hit, driving safe-haven flows. The index started in the year 2000 at 101.60 before rising to 121.00 in August 2001. The DXY then fell over the next few years, reaching a low of 71.00 in the financial crisis of 2008. Over the past 20 years, the US Dollar Index has traded across a wide range, from 120.00 to a low of 71.00. It is also important to remember that how the USD moves, i.e., whether the USD gets stronger or weaker, also depends on the performance of the other currency in the exchange rate. Conversely, when interest rates are lowered to stimulate economic growth, investors could look to invest in another country, pulling the USD lower. This is because higher interest rates attract foreign investment, lifting demand for the currency. Political events, as well as geopolitical events, can also influence the US dollar. The global status of the USD is mainly drivern by the strength of the US economy and changes in its value therefore having implications for the global economy.įor example, when US inflation is elevated, and the Fed raises interest rates to rein in consumer prices, the USD value often appreciates. Several key factors influence the value of the USD against other currencies, such as monetary policy decisions made by the Federal Reserve, which depend on the macroeconomic backdrop and data. The US Dollar Index rallied from a low point of 94.63 in mid-January to a 20-year high of just over 114 in late September.ĭXY has experienced a significant drop since the publication of cooler-than-expected inflation data. Expectations of slower rate hikes from the Fed, and a lower potential terminal rate for US interest rates, have resulted in a repositioned dollar. How did the US dollar perform in 2022?Īfter steadily climbing throughout 2021, the DXY saw a solid start to 2022. For example, EUR/USD measures the euro against the US dollar. The value of the USD is measured against the value of other currencies, creating the exchange rate. The USD is the world’s reserve currency and the most traded currency on the foreign exchange market. USD is the abbreviation for the US dollar or United States dollar, the official currency of the United States, the world’s most widespread and popular currency. Read on for the latest USD news and USD forecasts. The US Federal Reserve’s ( Fed) previously aggressive monetary contraction policy that saw the US interest rate raised by 425 basis points ( bp) over the course of 2022, from 0.25% in March to 4.50% in December. However, a series of 25 bp hikes this year may signal that the Fed intends to halt its hikes, this along with slowing rates of inflation and fears of a potential recession in the US have pulled the greenback off its highs. The ICE US Dollar Index (DXY) – a measure of the currency’s strength against a basket of rival currencies including the euro ( EUR), Japanese yen ( JPY) and British pound ( GBP) – stood at the 103 mark as of, having fallen over 10% from its 10-year high of 114.78 in September 2022. Can the US dollar keep on rising? – Photo: Andrii Spy_k / ![]()
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