The dollar rising sharply against virtually every major currency over the last two months
His fund at Jupiter Asset Management, like many others, was placing a popular wager on the next phase of the cycle: As the Fed’s tightening neared an end, it would halt the stampede of cash that raced in to seize on rising rates — and the US currency would fall.
That appeared to be playing out at times this year as the dollar drifted lower. Then, in July, it rapidly reversed course.
Fueled by a widening rift in the global economy as the US defies pessimistic forecasts and growth falters in China and Europe, the dollar has roared back, rising sharply against virtually every major currency over the last two months.
The greenback’s rebound is another example of how much markets have been blindsided by the surprising resilience of the US economy — and the persistent inflation that’s come with it.
Bloomberg 20 September 2023
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