US$
Since the start of September, the dollar has strengthened 8% against a trade-weighted basket of 26 currencies, according to a Federal Reserve index the dollar has benefited from the global flight from risky assets as well as the unwinding of bets made with borrowed cash. In the longer term, the dollar's health remains dependent on foreigners' appetite for U.S. assets, which may be tested as the economy fatters and government spending grows.
The dollar's recent climb is also part of a massive reversal of longstanding investing trends, such as buying emerging-market stocks or wagering on rising commodity prices. When investors retreat from such investments, they are often selling them in exchange for dollars.
If foreigners stopped buying American assets or started selling them, the dollar would plummet and interest rates would soar thus battering the already-weak economy.
The dollar's recent climb is also part of a massive reversal of longstanding investing trends, such as buying emerging-market stocks or wagering on rising commodity prices. When investors retreat from such investments, they are often selling them in exchange for dollars.
If foreigners stopped buying American assets or started selling them, the dollar would plummet and interest rates would soar thus battering the already-weak economy.