Why a stronger dollar is dangerous
It sets the stage for a nasty new Trump-China clash, among other things
![Pedestrians walk past a currency exchange shop in central Tokyo, Japan on April 17th 2024](https://www.economist.com/cdn-cgi/image/width=1424,quality=80,format=auto/content-assets/images/20240427_FNP501.jpg)
The dollar is looking formidable. As American growth has stayed strong and investors have scaled back bets that the Federal Reserve will cut interest rates, money has flooded into the country’s markets—and the greenback has shot up. It has risen by 4% this year, measured against a trade-weighted basket of currencies; the fundamentals point to further appreciation. With a presidential election looming, and both Democrats and Republicans determined to promote American manufacturing, the world is on the verge of a new period of strong-dollar geopolitics.
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This article appeared in the Finance & economics section of the print edition under the headline “The greenback’s back”
Finance & economics April 27th 2024
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