In the last few months, a Czech investor could use one completely trivial tactic to get money: Simply exchanging crowns for US dollars at the nearest exchange office was able to earn him almost ten percent since mid-July. That’s how much the dollar overtook the Czech currency in just three months. And so far there is no indication that he should lose his strong position.
“Given that the US economy is in better shape compared to Europe and the Fed does not rule out further rate hikes, investors prefer the US dollar. The whole thing was additionally strengthened by the increase in geopolitical tension,” explains Komerční banka analyst Jaromír Gec.
The so-called dollar index, which maps the value of the US currency against a basket of other key world currencies, is currently at its highest level since last November. From its July lows this year, it rose by almost seven percent. “The US dollar has been the strongest of the major world currencies for the past three months,” says XTB analyst Jiří Tyleček. He also reminds us of the important role of higher interest rates, which the Fed has been holding for a long time.
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2023-10-16 17:00:00
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