For more than a year, the US dollar has been gaining strength relative to other currencies, including the euro, yen, yuan and Canadian dollar. On Sept. 1 the US Dollar Index (DXY) hit a 20-year high, and as the chart below shows, the index has been risen steadily all year.
Source: MarketWatch
Rising interest rates have put upward pressure on the dollar, as foreign investors pour capital into the country. The dollar has also done well because the US economy is perceived to be stronger than Europe’s, which is suffering from an energy crisis. On Aug. 22 the euro fell to a two-decade low of 0.9903 against the dollar.
The New York Times stated in July that the dollar is the strongest it’s been in a generation, citing safe haven demand, inflation, higher interest rates and worries over growth as factors.
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