The U.S. dollar’s value is the strongest it has been in a generation devaluing currencies around the world and raising concerns about the future of the global economy by upending everything from the cost of international travel to the profitability of multinational companies.
At a Glance:
The diagram below shows how the U.S. dollar is demonstrating extraordinary strength against other global currencies this summer touching highs against the euro, the Japanese yen and others, with broad effects globally and within the United States.
The chart illustrates the percentage change to July 15 from Dec. 31 of each country’s official currency versus the U.S. dollar
When markets closed on 19th July in the U.S, it cost $1.02 to buy one euro, $1.20 to buy one British pound, and less than $0.01 to buy one yen. All are at or near historic lows against the dollar.
The world economy is fueled by the dollar. Prior to the pandemic, it was responsible for $6 trillion in daily activity, which encompassed everything from tourists using their credit cards to companies making substantial international investments. About 90% of all transactions involving foreign exchange are made in this manner.
However, as the world’s most important currency, the dollar often rises in times of turmoil, in part because investors consider it to be relatively safe and stable. Recently, it has been on a major surge against major global currencies as a result of inflation, high interest rates and deteriorating economic concerns.