To the contrary, the currency has risen in value this year, gaining 6% from its lowest point reached in early March, according to the US dollar index, which measures the greenback's value against a basket of other currencies.
The dollar's rise is primarily due to its privileged position as the world's reserve currency. That means that in times of crisis, investorsCalling it"the exorbitant privilege of the dollar," Kit Juckes, global head of foreign exchange strategy at Societe Generale said,"Lots of people want dollars all the time."
Unlike other currencies,"you find that you can print a lot of dollars without the dollar necessarily weakening dramatically," he said.pump multiple trillions of dollars in liquidity"The demand for safety in this climate is outpacing what the Fed has done," said Joe Manimbo of Western Union. Another reason for the dollar's appeal is the pressing need for cash by companies who have seen the crisisThe currency is also the most traded in the world on the foreign exchange market, and the Fed announced last month that it would facilitate currency swaps with several other central banks so they could increase their dollar reserves.
Demand for greenbacks is particularly high in emerging markets saddled with dollar-denominated debt, Juckes said, but,"Not all of them can get themselves out of trouble easily."
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