As reported Wednesday by Reuters, the value of a dollar had “hit a 14-year high against a basket of (competing) currencies,” including the euro, the yen, the pound and the franc, among others.
Likewise, the dollar index, which measures the U.S. dollar against a collection of the world’s top competing currencies, had risen to 100.53, a high not seen since 2003. And the stock market ended the previous week with some of its highest gains in years.
While this portended well for the United States, it had the potential to be very disadvantageous for the nations of Europe — particularly the leeches.
“The world’s interest rates have been dragged higher by the U.S. yield curve, creating the risk that interest rates may be too high for the still-fragile economies in Europe and emerging markets,” explained Stephen Jen of hedge fund Eurizon SLJ Capital.
The reason for the sudden spike in value reportedly lay with Trump’s proposals for boosting the U.S. economy. Plans such as those to cut taxes and boost infrastructure spending were expected to serve as a much-needed boon to President Barack Obama’s ailing economy.
“A move higher in interest rates next month is now a near dead cert, with the implied path for rates next year also moving higher and providing further support for the dollar,” he added.