"Dollar smirk": can the strengthening of the US currency end in a crisis

Due to the strengthening of the US DOLLARGiants such as IBM, Netflix, Johnson & Johnson and Philip Morris are forecasting billions in revenue losses. There is a risk that the US currency has entered a vicious circle,

Since the beginning of 2022, the US dollar has appreciated against almost all major world currencies. Between 1 January 2022 and 28 July 2022, it appreciated by 11.9% against the euro (€0.985/$1) and by 11.5% against the pound (£0.825/$1). Against the Japanese yen and the Swiss franc, the dollar appreciated by 16.8% and 4.9%, respectively, to 134.54 yen per $1 and 0.957 Swiss francs per $1, respectively.

"The rate at which the dollar is rising is the fastest it has been in a decade," said James Cavanaugh, chief financial officer of software vendor IBM. At the beginning of July 2022, the US currency was trading even more expensive than the euro for a short time.

The jump in the dollar to its highest level in the last 20 years has a negative impact on the financial performance of US corporations, writes The Financial Times. But this is not the only danger - further strengthening of the US currency threatens a number of problems not only for the United States, but also for a number of other states around the world.