Why is the US dollar so strong nowadays compared to other currencies considering the fact that around 40% of its current supply was printed in 2020?

Question

I understand that the demand increased for dollar in the past couple of years but still, with the recent 40% increase in its supply I would’ve expected some sort of a drop in value.

In: 0

Answer 1

Currency strength is relative – the US dollar can simultaneously lose purchasing power due to inflation (it is) and gain power relative to other currencies that are collapsing faster (they are).

Yeah the US has seen 10odd% inflation year over year, but so has the UK. Turkey is at a whopping 83%.

Many of the same inflationary pressures and policies are present in other countries too, and their currencies don’t have the same strength as the USD and have dropped even further, making the dollar “stronger” by comparison.