The US Dollar has risen against all currency majors except the GBP, thus consolidating its position of power in the recent past. This has been the result of robust economic and employment numbers in the US promoting the belief in a speedy revival of the economy. That there is bound to be revival in Europe too does not augur that well for the Dollar. The result of growth would be inflation and inflation in its turn would push yields higher has also contributed to the Dollar strength in no smaller way. In fact, it is pointed out by many analysts of the rising investment demand for the Dollar in the recent past which has led to many asset managers to go long dollars and short the other currencies. The asset movements seem to be supporting the dollar strength in addition to the bolder initiatives on the trade front by the US hinting that the US is already back on the global stage. There is also a likely pull back in some of the emerging market currencies as trade picks up and as many of them start importing goods to go back to the pre-pandemic levels of trade to meet domestic demand as well as local manufacturing activities. The same trend may be visible in the Rupee too where the trade deficit is likely to widen and the currency gradually conceding some ground.
