The surge in the US dollar to multi-year highs has triggered many worries, including the threat to the US recovery, heightened risks of global deflation via the impact on commodity prices, and the potential damage to emerging economies. All of these fears are overdone. Instead, we would view dollar strength as the natural consequence of current divergences in economic performance and in the prospects for monetary policy. If anything, it should be welcomed as helping to reduce global imbalances.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services