12 ms·
One common way of measuring the strength of the dollar is to compare it to a "basket of currencies": https://www.investopedia.com/terms/u/usdx.asp https://www.i
by nkurz 6y ago
One common way of measuring the strength of the dollar is to compare it to a "basket of currencies": https://www.investopedia.com/terms/u/usdx.asp https://www.investopedia.com/terms/u/usdx.asp
By this standard, the US dollar is down about 10% from its post-COVID crash high (103 -> 93). But over a longer time scale, it's up about 10% from where it spent most of the 2000's: https://www.marketwatch.com/investing/index/dxy/charts https://www.marketwatch.com/investing/index/dxy/charts.
So I think the answer both "yes, the dollar is signicantly weakening" and "the dollar is still slightly stronger than its recent historical norm".
- ericmay 6y agoYea great info to share. Thanks for that! I’m wondering if that describes this scenario: there aren’t enough dollars, there is high demand for them, but as they get printed they go into securities. What do you think?
- nkurz 6y agoI don't feel I understand well enough to offer much of an opinion, but I think that captures a lot of it. An important addendum might be that a lot of foreign debt is dollar denominated, which means that dollars are often required even to service debt that is not US originated. In my amateur opinion, this is a good primer: https://www.lynalden.com/global-dollar-short-squeeze/ https://www.lynalden.com/global-dollar-short-squeeze/