In today’s globalization, changes in the currency market have a profound impact on business operations. Recently, the performance of the dollar in the global exchange market has attracted widespread attention.

The dollar’s rise cyclone

Recently, the U.S. dollar has shown a strong upward momentum in the strong rankings of the world’s major currencies. Over the past month, the U.S. dollar has risen against all G10 currencies, with the U.S. dollar rising against the Yen, New Dollar, Norwegian Krone and Swedish Krone ranging from 3.6% to 6.4%. Currently, the U.S. dollar against a basket of major currencies has risen to a recent low of about 2.5% and is close to its highest level since March.

Reasons for the U.S. Dollar Rise

First, the release of a series of strong data in the U.S. indicates that the U.S. economy remains resilient, which represents support for the U.S. dollar. Second, a large number of U.S. government bonds are expected to be issued over the rest of the year, which will pull out liquidity from the market and potentially create demand for the U.S. dollar.

The market reaction

The rise in the dollar could be a short-term resistance to venture capital as it helps tighten credit conditions, while also putting pressure on U.S. exporters and multinationals’ revenue and profits, and increasing risks of asset outflows from emerging markets.

c) Future prospects

As for how long the strength of the dollar will last over the past month, the industry is now widely dissenting. Many exchange market traders still believe that the declining trend of the dollar may still be a matter of time. However, there is a view that the current strength of the dollar will be difficult to sustain as the Federal Reserve may delay the rate hike and the European Central Bank may have more austerity work to do.