The Strong Dollar: Can It Continue?

The U.S. dollar has risen sharply off its May 2021 low, posting a 14% gain (at its recent peak) against a broad basket of currencies. It now stands near its highest levels in decades versus major currencies like the euro, the British pound and Japanese yen.

The dollar has posted a sharp rise since mid-2021

Chart shows the Bloomberg U.S. Dollar Index between May 2021 and August 1, 2022. The index was at 1,261 as of August 1, down slightly from its recent peak of 1297 on 7/14/2022.

Source: Bloomberg.

Bloomberg Dollar Spot Index (BBDXY Index). Daily data as of 8/3/2022, 3:25pm ET. Past performance is no guarantee of future results.

Some major currencies—such as the Japanese yen, Swedish krona, euro and British pound—have declined precipitously against the dollar over the past year.

Meanwhile, many emerging-market currencies have plummeted versus the dollar—some to all-time lows.