[The dollar's epic rally reverses, and investors expect further declines]
The dollar's 2022 rally has made the world realize its ability to inflict pain on the global economy. Investors are now optimistic that the dollar's strength has now come to an end.
As of December 28, the dollar has risen 8.9% so far this year, according to the Wall Street Journal Dollar Index, which tracks the dollar's value against 16 other currencies. This would mark the dollar's biggest annual gain since 2014. The index peaked in late September, reaching its highest level since 2001.
But as investors bet on slowing U.S. inflation, the dollar has turned defensive by the end of the year, giving up about half of its gains since peaking.
The dollar's 2022 rally has made the world realize its ability to inflict pain on the global economy. Investors are now optimistic that the dollar's strength has now come to an end.
As of December 28, the dollar has risen 8.9% so far this year, according to the Wall Street Journal Dollar Index, which tracks the dollar's value against 16 other currencies. This would mark the dollar's biggest annual gain since 2014. The index peaked in late September, reaching its highest level since 2001.
But as investors bet on slowing U.S. inflation, the dollar has turned defensive by the end of the year, giving up about half of its gains since peaking.