The dollar is stronger than it has been for a long time

Frankfurt In the past few months, the dollar exchange rate has almost only known one direction: up. Since the beginning of the year, it has gained around 14 percent in value against the euro. It is also up over 17 percent against the British pound and almost 22 percent against the Japanese yen. Last Thursday, the dollar index, which measures value against other major currencies, hit its highest level in 20 years.

Experts attribute the strength of the dollar primarily to its role as the ultimate safe asset in the global financial system. “Everyone wants the safe dollar,” argues Deutsche Bank’s chief FX analyst George Saravelos. From his point of view, one indicator of this is the drastic increase in overnight deposits at the US Federal Reserve. In September last year, these were around one trillion dollars – currently it is over two trillion dollars.