The US currency is strengthening its position compared to the world’s major currencies.either. So far in 2022, the value of the dollar has hit levels not seen since the early 2000s, almost reaching parity with the euro and growing strongly against the Japanese yen, one of the most stable currencies in recent decades.
The dollar has also gained ground against the pound sterling –almost to the same extent as with the euro– and to a lesser measured against the Chinese yuan.
The inflation derived from the pandemic and the effort of the United States monetary authorities to stop it through higher interest rates are behind this scenario. The increase in base interest rates by the US Federal Reserve contributed to attracting investors to the dollar, by offering a higher return on credit.
Also, fear of a gas crisis in Europe in case Russia decides to cut supply further drives buyers away from the euro, trend that the European Central Bank is also trying to counteract raising interest rates.
The sharpest rise in the dollar has been recorded since March, shortly after the Federal Reserve approved the first increase in its target interest rate in more than three years. However, the strengthening of the value of the dollar was already around 5% against the euro, the yen and the pound sterling since November 2021, when inflation forecasts heralded an imminent rise in interest rates and investors began to bet more. to the dollar.
A) Yes, Until July 29, 2022, the dollar accumulates an increase of 23% with respect to the yen in the last 12 monthstaking as reference its price on August 2, 2021 according to Yahoo Finance. In the same period, the dollar appreciated 16% against the euro and 14% against the pound sterling. The Chinese yuan, in turn, has only lost less than 5% of its value against the US currency.
