The Dollar Is the Fortress China Struggles to Breach
Contrary to predictions of its weakening status, the greenback remains a linchpin of global trade. Welcome to the ‘Imperial Circle.’
Dollar reigns supreme.
Photographer: Paul Yeung/BloombergIf this is what a bad year for the dollar looks like, I'll take it. Widespread predictions of a significant retreat after a bumper 2022 haven't come to pass. The greenback is still the place to be. Not just in good times, but when the rest of the world looks less than enticing. No mere currency, it sometimes resembles a medieval fortress, complete with a moat.
The epic rally last year was always going to be tough to repeat. So it's not too shabby that the dollar is pretty much where it traded on Dec. 31, according to the Bloomberg Dollar Spot Index. This is a product of several forces: The Federal Reserve has laughed interest-rate cuts out of the room, China's rebound has fizzled, and Japan can't decide whether it wants to unwind ultra-loose money or not. The euro area is struggling.