The US dollar has benefitted this year despite some quite serious escalations in US-China trade tensions, mainly because the greenback is still considered a safer currency to own than most others. By mid-May, the Dollar Index was nearly 2 percent higher year-to-date; it was only 0.5 percent away from making a 2-year high.
The greenback’s 2019 strength has come in spite of a dovish turn by the Federal Reserve, which said in March it expects no interest rate increase this year. Fortunately for dollar holders, the rest of the world has problems and many other central banks have also turned dovish, removing some of the policy-based incentives for selling USD.
In May, HSBC warned against thinking that the dollar has got too high. The bank highlighted the “desolation and destruction” (an exaggeration) facing other economies and currencies. “You can never get too high,” the bank’s chief analyst said. “What would you want to buy out there if not dollars?”
For more USD bank forecasts and cross-rate trends read the report USD trends and forecasts.
USD in the News
The Australian dollar is now worth only 68.6¢ after another week of heavy losses, and now one senior analyst has predicted exchange rates in the “mid-60s” this year – rates not seen since 2009.
Posted: 18 May, 2019
Five banks have been fined a collective €1.07 billion by the European Commission for running a “cartel” that manipulated foreign exchange rates for financial gain.
Posted: 16 May, 2019
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