Although the US dollar has retreated from last year’s peaks, which saw it reach its highest level on a trade-weighted basis in 20 years, it has remained at very elevated levels in 2023.
The continuing strength of the dollar is very much linked to the ongoing impressive performance of the US economy and the elevated level of US interest rates.
Against this backdrop, the Fed has raised rates by 525bps to a 5.25-5.50% range.
The high US rate environment is providing considerable support for the dollar, helping it to make ground over the summer.
