The prophets of doom keep making grim predictions about an imminent fall of the US dollar. However, these gloomy forecasts are like water off a duck’s back for the greenback. It retains its status of the main reserve currency, climbing to new highs. It also demonstrates a strong resilience to external headwinds, indicating the strength of the US economy.
US Treasury Secretary Janet Yellen believes that the recent rally of the US dollar versus its major rivals has been fueled by the country's robust economic expansion. She also acknowledged a competent job of the Fed, namely interest rate hikes and capital inflows. "The US position is that we believe in market-determined exchange rates", Yellen stressed.
"It is very rarely appropriate to intervene, Yellen said, adding "I do not see this as one of these occasions."
On July 13, the US dollar exceeded the exchange rate of the euro. Before that, it reached the parity level with the euro for the first time in 20 years. The US currency maintained its bull run even despite record annual inflation. By the end of June, it accelerated to 9.1% versus the May reading of 8.6%. Analysts had predicted a rise to 8.8%.
