USD: The Dollar Is More Armored Division Than Currency

There’s just no getting past the supremacy of the dollar, much as skeptics of American influence wish for it or lonely yen bulls cry for relief. The greenback has been frequently tipped to retreat, only for it to blow away everything in front of it. This resilience might not last, but as long as it does, it reminds a world once in thrall to China’s ascent that the US is the essential economic force. Just ask all the central bankers quizzed as much, if not more, about the Federal Reserve’s intentions as their own. Sovereignty can be relative.

Events billed as heralding a pullback have barely made a dent: Japan’s decision to end eight years of negative interest rates fizzled in markets; the country’s finance minister has resorted to jawboning the yen stronger, and traders are handicapping the prospects of intervention by Tokyo. Even projections of rate cuts by the Fed aren’t doing it: Reductions are likely to be synchronous among the biggest authorities, preventing any major currency from outshining the dollar. This year was meant to be one in which the dollar fell, but a key index of its support is off to a strong start.