For decades, the US dollar has been the world's reserve currency, influencing trade, energy prices, and global economic stability. But as the financial world evolves, so does the dollar's value and influence. While the Federal Reserve’s policies play a pivotal role, the actions of nations like China, Japan, and India are reshaping the currency landscape.
1. US Federal Reserve’s Tight Monetary Policies The Federal Reserve’s decision to raise interest rates in response to inflation made dollar-denominated assets more attractive to investors worldwide.
Higher returns on US investments pulled capital from other markets, strengthening the dollar.
2. Trade Wars and Geopolitical Tensions
Conflicts between the US and China intensified, with trade tariffs and sanctions making the dollar a preferred safe haven.
3. Impact of Oil-Producing Nations
Saudi Arabia and OPEC countries played a subtle role. By adjusting oil prices and production, they indirectly influenced the dollar's value, given that oil is traded in dollars.
As oil prices soared, nations needed more dollars, further strengthening its position globally.
Your email address will not be published. Required fields are marked *
Comments