The U.S. dollar exchange rate soars to a new high in 2024, and the Fed’s policy runs counter to other central banks
Key indicators show that the strength of the U.S. dollar has reached new highs in 2024, and market expectations for the Federal Reserve to cut interest rates in the short term continue to be subdued. The Bloomberg U.S. dollar spot exchange rate index rose 0.4% on Wednesday to 1,271.36 points, setting a new record for the year.
The dollar's continued rise reflects the Federal Reserve's firm stance on maintaining high interest rate policies, which is in sharp contrast to the policies of other major economies, leading to a significant widening of interest rate differences between the United States and other countries.
The yen fell to its lowest level since 1986, raising the risk that Japanese authorities may intervene in the currency market again to maintain low interest rate policies.
Meanwhile, the European Central Bank and the Bank of Canada began monetary easing in early June, while the Federal Reserve continued to keep interest rates at their highest levels in more than two decades.
Analysts at JPMorgan Asset Management believe the dollar will continue to be supported as long as the Fed's borrowing costs remain high relative to other central banks. However, they cautioned that this support may taper off at some point.
