A growing crop of experts warn that the dollar's strength could spell further doom and gloom for the slumping stock market, as it has proven, due to the U.S. dollar's surge against other currencies.
This year, the dollar has appreciated against other currencies.
The Dollar Index, which measures the dollar against a weighted average of six other currencies, was up.12% to more than 114 points, its highest level in over a decade.
Morgan Stanley analysts predicted on Monday that the index will climb another 4% to 118 by the end of the year, which would match a 36-year high.
Over the past year, the euro has plummeted 18% against the dollar and was worth $.94 Wednesday, its lowest level since 2002, just two months after reaching parity with the dollar.
The British pound fell to an all-time low of $1.035 against the dollar early Monday, and has recovered slightly, trading at $1.068 Wednesday.
The Japanese central bank's steadfast commitment to low interest rates has led to a 25% decline in the value of the Japanese currency against the dollar.
The Chinese currency fell to its lowest level against the dollar since 2008 on Wednesday.
The strong dollar is bad news for multinational companies and the stock market. The recent move in the U.S. dollar creates an "untold situation for risk assets that historically has ended in," wrote Michael Wilson in a Monday note.
The dollar jumped 22% in 2008 after the Great Recession and 7% in early 2020 after the Covid-19 epidemic halted the global economy.
After crashing following Russia's invasion of Ukraine in February, the ruble is one of the best performing currencies against the dollar in the next five years. The Russian government artificially propped up the ruble's value by implementing strict capital controls as the country became increasingly isolated from the global economy, according to many.
History shows that markets won't recover until Greenback Falls.
The U.S. dollar has hit a 20-year high.
Weakening stock market is worse due to strong dollar.
All Rights Reserved © 2024
