The year has been unique for the U.S. dollar. Just a couple months prior, it was so constant, an anchor of the global economy. Now, it looks like it is slipping away. Almost 10% down against other major currencies. People can blame trade decisions or maybe it is the Fed cutting rates. One way or another, money is flowing out of the U.S. and it is not flowing slowly.
This is raising other currencies, even the ones that are far ahead of where they thought they'd be. Sweden’s krona is having a better year than anyone thought. Norway is also doing well, even as oil prices have not helped. Both of them continue to talk about lowering interest rates, but their currencies continue to climb. They even make the dollar look weaker.
The euro is up. So is the yen. The Swiss franc is also up. However, strong does not always equal healthy. In Switzerland they are seeing declining prices. That sounds good, right? Well not necessarily. Deflation will hinder growth. The central bank might have to take interest rates back below zero. Nobody is interested in that.
Taiwan and South Korea, two of the four Asian Tiger economies, are getting a sharp lift in their currencies. Not necessarily because these economies are strong, but because investors are pulling money out of U.S. markets and looking for a place to put it. Even China, which has remained relatively precarious, is trying to gauge the situation very carefully.
Then there are the outliers. In Argentina, the peso fell after a major policy shift, but the worst didn't occur. The IMF stepped in, so that would help. Mexico started the year hit by a drop in its peso, but it is now bouncing back. The British pound appears to be doing ok, but still not super stable as it could have been.
There is so much going on right now. Some of it can be explained, some cannot. Every market adjustment indicates something about where the world seems to be placing its trust and where it seems to be pulling it away.
Sourcing the image appropriately
https://pixabay.com/photos/u-s-dollar-dollar-money-banknote-462373/