Key points
- Strong dollar hurts US exporters and commodities.
- Rises during risk-off episodes.
- Fed rate hikes typically strengthen dollar.
Example
A 5% USD surge in a quarter often weighs on commodities and non-US earnings translations, while easing imported inflation in the US.
In history
DXY peaked near 114 in September 2022—the highest in two decades—tightening global financial conditions and pressuring EM currencies.
Related terms