The dollar index, which measures the strength of the US currency against a basket of six reference currencies, registers its highest rise in the first year of government of the last three presidents of the United States, with an increase of 5.65% gain in Joe Biden’s first year this January 20.
The indicator of the strength of the dollar went from 90.47 points on January 20, 2021, when Joe Biden took office as president of the United States, and until this Thursday it stands at 95.74 points, an increase of 5.88% in 12 months.
While in previous governments, the dollar index had decreases in its level. In the case of President Donald Trump, the index fell by 10.10%, going from 100.74 to 90.57 points in his first year in office in 2017; For its part, the first year of Barack Obama’s government in 2009, the dollar index fell 9.31% from 86.38 to 78.34 points.
Only in the administration of President George Bush, the dollar index strengthened by 6.19% in its first year, going from 110.66 to 117.51 units in 2001.
Janneth Quiroz, deputy director of Economic Analysis at Monex, commented that “low levels were reached due to an issue of economic recovery in 2020, with economic conditions different from those presented by Donald Trump and Obama. Before Biden’s protest, a last economic package had been approved with Trump, which brought the dollar index to low levels, for which a significant rebound has been seen with the current government.
He recalled that the dollar index is made up of a basket of six currencies from developed countries, including the euro, with a weight of almost 58% of the index. There are also the Swiss franc, the yen, the Canadian dollar, the British pound and the Swedish krona.
“According to the last speech of the European Central Bank, they do not expect changes in their reference interest rate, which would weaken the euro and give the dollar greater strength,” said the specialist.
“The expectation of economic recovery throughout 2021 has improved the upward trend of the dollar. Although for this 2022, with the estimate of four increases in the interest rate, the risk-free rate of the United States will become more attractive, therefore, there will be greater appetite for the dollar”, he concluded.