The world’s reserve currency is the benchmark pricing mechanism for most commodities. Since interest rates are a primary factor for the value of one reserve foreign currency against others, the 500-basis point increase in the U.S. Fed Funds Rate starting in March 2022 lifted the dollar index to the highest level since 2002 in September 2022.
In a May 13 Barchart article, I asked, “Will the dollar index fall below 100, and does it matter?” The index was at the 102.509 level on May 12, when I wrote, “In mid-May, the June dollar index was at the 102.50 level, and the reserve currency’s index continues to go nowhere fast.” One month later, the index made a slightly higher high but remains in a narrow range over the first half of 2023.
