Chart No. 207
Macro
5 min read
Free
The dollar is doing less than the headlines say.
Every few weeks someone announces the end of the dollar. Here is the chart that settles most arguments.
Nadia Brennan
Founder and editor
Illustrative data based on public sources.
DXY · EURUSD
The dollar index (DXY) is at 98.4, down 4% in a year and down 14% from its 2022 peak. It is still higher than at any point between 2004 and 2014.
The chart that settles most arguments
Plot the dollar against the gap between US and foreign interest rates and most of the moves since 2010 disappear. The dollar fell this year because that gap narrowed, not because anyone stopped using it.
What would change our mind
A sustained fall in the share of foreign central bank reserves held in dollars. It is at 58%, roughly where it was five years ago.
Not investment advice. Carry writes about markets; it does not tell you what to buy or sell. Charts use illustrative data unless a source says otherwise.
