The United States economy continues to demonstrate remarkable resilience. If projections are to be believed, inflation will remain well above target for at least the next two or three years. This sanguine outlook is exacerbated by the fact that we expect tariffs to continue to stoke inflation through early next year. These milestones emphasize the positive trends and hardship that our economic landscape is experiencing at this time.
The latest predictions show the economy going strong, but inflationary pressures are likely to stick around. Some analysts expect continued price growth across sectors, driven in large part by tariff implementations. This unfortunate situation highlights the often daunting reality of starting a new economic policy in a rapidly changing international market.
Currency exchange rates speak to these economic realities. In fact, the USD reached multiyear highs in exchange rate values against the euro, the British pound, and the Swedish krona. The USD is down -0.52% today vs the euro (EUR). Further, it tanked by 0.61% compared to the British pound (GBP). The dollar has lost 0.31% of its value relative to the Japanese yen (JPY). It has now decreased by 0.87% over the Swiss franc (CHF). The USD dollar is up a modest 0.15% vs. CAD. It saw slight increases of 0.04% vs the Australian dollar (AUD) and 0.09% vs the New Zealand dollar (NZD).
The euro, meanwhile, has been on a bullish tear against the USD, up by 0.52%. Beyond the dollar, it has strengthened against other currencies, including the CAD, AUD, and NZD. It has experienced a small drop of 0.34% versus the CHF.
These exchange rate moves are non-trivial, potentially impacting trade balances, investment decisions, and economic activity. This dynamic between inflation and currency values is just one example of how deeply interconnected our global economies are on every level.