THE NEXT NORMAL

Understanding the complex world of currency markets can be challenging, but analyzing individual currency pairs and the DXY chart can provide valuable insights into the USD's relative strength against other currencies. Let's dive in! ??

The Federal Reserve launched the U.S. Dollar Index (DXY) on March 13, 1973. The DXY provides a real-time, market-adjusted value of the U.S. dollar against six global currencies: the Euro, Yen, Pound, Canadian Dollar, Krona, and Franc.

Notice the strength the U.S. dollar has commanded since the '08-'09?Great?Financial Crisis,?as denoted by the DXY (center chart). Investors at large sought refuge in the U.S. dollar due to its reputation as a safe-haven currency during the financial turmoil that began in 2008.

Temporally, since then, there's been?a Tariff War, Global Pandemic Recession, Ukraine Invasion, Climate Calamities, Hyperinflation, Nationalism, Social Unrest,?and now, during a very polarized election cycle,?Populism.?

Money during all this seeks to de-risk. The United States is the leading?Superpower,?and the dollar remains the world's reserve currency. The King Dollar has appreciated by more than 30% against its trading partners. Japan, in particular, has seen its currency plummet 60%. For those considering a trip to the?Far East,?the Yen's weakness is a boon for American travelers.

As I've explained, there are pros and cons to countries having weak or strong currencies. For long-term economic viability, security, and prosperity, I would prefer a stable currency. This offers a fair and equitable environment for merchants and service providers to conduct business in a competitive landscape that values integrity over gamesmanship.