How the new currency scenario impacts your portfolio
The simultaneous monetary shift by central banks strengthens the dollar and US fixed income gains attractiveness. Among those benefiting are European exporters.
The US dollar has strengthened by around 2.25% in two weeks following the Federal Reserve's decision to raise interest rates by 25 basis points to 3.75-4%. This move, the first in three years, was made despite pressure from US President Donald Trump and was accompanied by a hawkish tone. The dollar's gain comes amid a simultaneous tightening of monetary policy by the Fed, the European Central Bank, and the Bank of Japan, with the latter two raising rates to 2.5% and 1.25% respectively.
Experts have differing views on the dollar's future performance, with some seeing it as a safe-haven asset and others predicting a weakening due to the US's fragile external financing.
Written by urgent.news from Expansion ES's report — not a translation of it. Machine-written — may contain errors; check the original before relying on it.
