This tag examines the structuring role of the dollar in the international financial system. Dominant reserve currency, invoicing currency of global trade and safe-haven asset, the dollar shapes global financial conditions well beyond U.S. borders. It also covers the tensions around this hegemony and de-dollarization attempts.
A durably strong dollar can persist without triggering a visible global crisis. Its effects diffuse through balance sheets, financing flows and external balances rather than concentrating in sudden shocks.
A durably strong dollar acts as a silent filter that reshapes the hierarchy of financial performance, dissociating local returns from real returns once converted into the pivot currency.
A persistently strong dollar does not necessarily trigger a global financial crisis. Empirical observation shows it operates as a diffuse adjustment mechanism, redistributing constraints across time and space rather than concentrating them into a single systemic event.
From 2022 to 2024, the yen fell about 27% against the dollar and hit its weakest level since 1990 — without triggering a single classic currency-crisis signal. TL;DR Between 2022 and 2024 the yen lost about 27% against the dollar…
De-dollarization is among the most discussed macro theses since 2022. The measured flows — IMF COFER, SWIFT, BIS statistics — tell a more contained story than the geopolitical narrative. DTWEXBGS itself has not declined. TL;DR The yuan's share of global…
September 2024, the Fed launched its cutting cycle: -100 cumulative basis points by May 18, 2026. Classical theory predicted a broad-dollar depreciation of -3 to -5%. Observed: -1.2%. Three competing hypotheses feed the analysis. TL;DR DTWEXBGS slipped just 1.2% across…
DTWEXBGS, by incorporating yuan, peso, won, real, and rupee at 37% of the basket, directly captures dollar pressure on emerging economies. Three transmission channels, eight documented crises since 1980, and an open question on the current cycle. TL;DR At 37%…
DTWEXBGS, reconstructed through pre-2019 Fed series, has cycled through seven distinct phases since 1973. Volcker, Plaza Accord, Clinton, GFC, Powell 2022: the temporal taxonomy structures any comparative reading. TL;DR The reconstructed broad dollar's upswings ran seven to eleven years and…
The DXY covers six developed-market currencies with weights frozen since 1973, 57.6% of which is the euro. DTWEXBGS covers 26 trade-partner currencies with annual rebalancing, including 14.8% in yuan. The two indices answer different questions. TL;DR In 2022 one dollar…
DTWEXBGS aggregates the dollar against 26 partner currencies weighted by bilateral trade flows and refreshed annually. The formula is written as weighted geometric averages, but it reads through trade flows. TL;DR The January 2019 revision folded three legacy Fed dollar…
