Doha: Qatar National Bank (QNB) attributed the dollar’s strength to the relatively strong performance of the U.S. economy, calling the USD a “safe haven” instrument that was again substantiated by geopolitical turbulence in Europe and Asia.
QNB’s weekly report predicted that the advanced economies are likely to remain in a more fragile position in terms of growth compared to the dollar, which will remain high for some time, adding that that the value of the greenback has recently risen, against major currencies to levels not seen in almost two decades, stressing that the US Dollar Index (DXY) has increased 10% since pre-pandemic levels with more 10% a year, and 19% compared to the post-pandemic levels, while this increase
encompassed all major currencies, including the euro and the Japanese yen.
The report showed that the dollar was supported by high demand from global investors at the beginning of the pandemic, But soon after that, the US dollar has depreciated for six months between 2020 May and 2021 January against major currencies when the USA introduced economic incentives faster than other economies. But those moves later completely reversed their direction, which led to an even steeper rise in the value of the US dollar. This included a rise of 17 percent against the euro, 24 percent against the yen, and 13 percent against emerging market currencies.
The report attributed the developments in the value of the dollar to three main factors, the first of which is the…
