“King Dollar” – A Post-Dollar World Is Coming?

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2022-11-23 20:32:29

“king dollar” represents the position of the dollar in international financial markets this year.

The value of the Dollar is increasing day by day due to the aggressive policy of raising interest rates by the US Federal Reserve and the threat of a global recession. The dollar rose to a 24-year high against the yen. The Dollar against the Euro is at a 20-year high.

In terms of foreign exchange market prices, the DXY index, which shows the value of the Dollar against the currencies of major trading nations, is up 12% this year.

Dollar vs Yen (JPY) rate up 20%

and the Euro-Dollar exchange rate fell by more than 11%.

The US dollar has also gained more than 10% against the Korean won.

Source:News1 Korea

This ‘king dollar’ phenomenon shows that the United States, a global hegemon, is very strong. The cash flow of investors around the world is gradually withdrawing from risky investment channels such as Stocks and cryptocurrencies back to safe investment channels such as bonds, gold and especially now the Dollar.
Megan Green, chief economist at consulting firm Crawl, wrote in the Financial Times: “Dollar strength is expected to continue for some time.”

The last 2 bulls in the crypto market have also seen a negative correlation between BTC and DXY

Every time the DXY decreases, BTC will tend to increase, and now the opposite is true. For those who are investing in cryptocurrencies, they want the DXY to decrease or cool down at the moment.

But there’s a catch: Mark Hafele, chief investment officer at UBS Global Wealth Management, commented this month that “the dollar is likely to continue to appreciate in the short-term, given the recent backdrop for investors. risk-averse investments appear in the market.”

However, a strong dollar could hold back US companies. Morgan Stanley strategist Michael Wilson explains that a strong dollar is not necessarily positive for US stocks. This may be because American companies suffer losses when they convert the money they earn abroad into Dollars.

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