Why is the US DOLLAR so strong?

Question

The chart shows how several currencies did in 2024. In particular, it shows a very strong US dollar, while all other currencies weakened. Why do you think the US dollar is so strong?

Lynx122 · Accepted Answer

The Swiss central bank weakened the franc on purpose. They put the interest rate down to 0.5% while the U. S. dollar is still at 4.5%. This was because there was a bunch of turmoil in 2024 and in those times a lot of people buy swiss franks but the central bank doesn't want the franc to become too strong because they constantly have to keep an eye on swiss businesses who export. They are already at a disadvantage because they have high production costs so they need to provide the best value the highest quality products and services to get any customers but if the franc is too strong even that might not be enough.

It's not helpful to have the strongest currency if all your companies go out of business. Switzerland didn't have the same problems with inflation as most of the world so it is not dangerous to lower the interest rate this much. The central bank even talked about going back to negative interest rates if the upwards pressure on the franc becomes too strong.

They wanted to push investors away to keep the franc at a more reasonable level. Obviously people will be more likely to buy a bond with 4.5% rather than 0.5% return so it worked.

I think the U. S. is established and in 2024 it was a difficult year for the world as a whole I'd say and that probably is a reason why the dollar is strong and also the tech sector is contributing a lot.

OlderAndWiser · Accepted Answer

The rest of the world knew that trump would win the election!

sage2021 · Accepted Answer

It has got to be because of Trump becoming the president of the United States again!
And this time will be different and not like his other presidency. He is respectful and respected by other countries once again.

Especially when Biden proved he is the destroyer of America and even in his very last days of being the so-called president (NOT) he is giving Ukraine the rest of Americans tax payers money to another country when Americans are struggling like never before!

I'm sorry his mother ever gave birth to such an evil person and calling him a person is rating him higher than he deserves!

He is just pure evil - a bunch of protoplasm walking around spreading his evilness anywhere he can.

But he will have to answer to the Lord God Almighty pretty soon and God's wrath will come upon him.✝️

chrissykerdock · Accepted Answer

we're still the world's currency

monorprise · Answer

The dollar really shouldn't be strong, unless its relative to everyone else's currency.

The U. S. goverment has printed a lot of money. The only advantage america has over most of theses countries is our largest in the world domestic consumer market. A product of our disposable income and improved efficiency. We have a lot to sell too and can make most anything and the best there is.

Smaller economies like the ones listed are more minimal.

Still the dollar should be weaker than it is.

Syntosi · Answer

The "strength" or "weakness" of a currency means absolutely nothing as it is entirely a choice of the country that controls it. The only exception is when a country loses control over the value such as what is happening in Russia currently but that is the exception and not the rule.

The real question here is why different countries set the value of their currencies at different levels and that is also a fairly simple question. The biggest reason why a country would want to have a strong or a weak currency simply boils down to how much it imports and how much it exports. If they import a lot then they want a high value for their currency and if they export a lot they would want a low value for their currency. That is all.

Anonymous · Answer

Well of course that is due to muted inflation & robust consumer spending, that is what makes our economy the strongest and has a direct impact on the strength of the American dollar.

Here is the thing though about the USD… The US Govt barrows money more than pays it back, which is bad since if we were to lose the #1 ranking we’d automatically default on our debt to the deficit leading to a depression scenario… We should be paying off our debts, cut the amount we barrow, etc. though it is scary to think about it…. It is also scary how some politicians each year think defaulting on our debt instead of raising the deficit would be a good idea since that would make the nightmare depression scenario a reality.

D_Bone_Steak · Answer

Because of Trump. Now that he's back, it's time to win again.

RavVid · Answer

Interesting. Obviously people are wanting USD to push the relative rise over other countries. For 2024 2nd & 3rd quarter the USD was declining relative to the UK pound. After early Nov it has gone on a march up.

I'm struggling as to why.

DJB72 · Answer

It's still the international reserve. Go back just over a century when Stirling was the reserve and the figures would show similar trends. After WW1 Stirling was essentially replaced by the Greenback as British influence waned and American waxed.

Watch for the BRICS gold backed currency to take over in about 6 years time. I doubt it'll happen during Trump's term.

Avicenna · Answer

It’s overvalued, but economic weakness in the EU, Japan, and elsewhere means there are fewer places for capital to go.

Joshydavid25 · Answer

I guess Trump's election really was that impactful.. Not to mention the Republican sweep as well..

NathanDavis · Answer

because all the weaponry is sold in US dollars...

Anonymous · Answer

I know who has ZERO to do with it-Trump. Hilarious how many people on this site will bend over backward to give him credit for things he has nothing to do with and then everything bad is still Biden’s fault. I guess that’s how cults work…(not aimed at the asker even though he’s total manga too)

jshm2 · Answer

LOL, it's rather erroneous and misses the point.  The dollar is actually DOWN overall as a global currency - despite being the most traded currency.

Dongie · Answer

That's a good question. I'd like to know if anyone can say.

Hispanic-Cool-Guy · Answer

I believe because the U. S. has the best professionals sports, Hollywood entertainment is the best, biggest and most successful and influential companies in the world and many people by the several millions like to visit the U. S. A.

ProbablyClueless · Answer

Credit where it's due: Jerome Powell handled the pandemic recovery very very very competently.

exitseven · Answer

In 1924 most of the sane world knew the Biden administration's days were numbered.

robocop666 · Answer

hhm I thought it was about to collapse and we would all die. Oh this is fear porn from the media to get views.

Anonymous · Answer

The U. S. dollar. "Because it's everywhere you want to be".🤣

NicholasRedone · Answer

Shrugs - I have not enough brain power 🧠👀

Ifdyourmom · Answer

Because our economy is a lot better now

noohair · Answer

It is the best horrible currency

Why is the US DOLLAR so strong?

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