Though bitcoin and other cryptocurrencies are the talk of the moment, the good old US dollar still reigns as the world’s reserve currency. But it hasn’t been too mighty as of late.
The US Dollar Index, which measures the greenback versus the euro, yen and several other major global currencies, has fallen about 2.5% in the past three months -— and it’s now down more than 7% in 2021.
Fears of rising inflation are taking a bite out of the dollar, as are expectations that the Federal Reserve will keep interest rates near zero for the foreseeable future despite inflation concerns. Both inflation and historically low interest rates lower the value of a currency over time.
A weaker dollar could be bad news for any American looking to travel abroad anytime soon as well as US consumers looking to buy exported goods, which become more expensive as the dollar falls.
The greenback’s slump is also one of the reasons that prices for oil,