Despite Our Own Inflation, the Dollar Dominance Takes Down the Yen and Euro

Source: Ludwig von Mises Institute
by Thorsten Polleit

“Since the beginning of 2021, the US dollar has appreciated noticeably against many world currencies. There are many reasons for this. In times of elevated economic and political uncertainty, investors increasingly favor the greenback, which they still consider a ‘safe haven.’ In addition, US yields have been edging higher. Both increase demand for the US dollar and raise its external value. The Japanese yen and the euro, in particular, have lost significantly against the US currency: the yen has dropped 34 percent since December 2020, and the euro has fallen 20 percent since May 2021 — and has nearly returned to parity with the US dollar. The question is why?” (08/04/22)