During the global financial crisis, the Fed slashed interest rates and launched a massive asset purchase programme, essentially boosting the domestic economy by lowering the exchange rate of its currency. In the post-epidemic era, the inflation fever persisted, the conflict between Russia and Ukraine intensified the rise in prices, and the focus of the Federal Reserve randomly shifted to curbing inflation.

As a result, as the dollar hits a 20-year high, investors are increasingly sceptical that the Fed is pushing up the dollar to curb stubbornly high inflation, the "anti-currency war".

The dollar index hit a 20-year high at the start of trading on Friday, breaking the 104 mark at one point, and then fell slightly to stand above 103 and have risen for five consecutive weeks.

Mark McCormick, head of FX strategy at TD Securities, was quoted by the Financial Times as saying: "We now live in a world where stronger currencies and offsetting inflation drivers are actually welcomed by policy makers. "

It is worth mentioning that, given the unique position of the dollar at the heart of the global financial system, many other central banks are now under a lot of pressure from the Fed's "anti-currency war".

The dollar rose, Europe came under pressure

McCormick believes that central banks other than the Fed might have embraced the surge in the dollar, but now the surge in the dollar means that their currencies are depreciating, making it harder for them to catch up with the Fed.

A devaluation of the local currency will push up the prices of imported goods and services, thus pushing up inflation. Goldman Sachs Group analyst pointed out that a new era of "anti-currency war" has come.Central banks in the larger developed economies need to raise interest rates by an average of 10 basis points to offset the 1 per cent depreciation of their currencies.

Take the European Union as an example.Isabel Schnabel, a member of the ECB's executive board, said in an interview with the Financial Times this week that the ECB was "closely watching" the impact of a weaker euro on inflation, although she reiterated that the ECB would not target exchange rates.

Last week, the euro fell to less than $1.05 against the dollar, hitting a five-year low and has fallen 7 per cent against the dollar so far this year. Market speculation, as Russia and Ukraine continue to stalemate, the euro against the dollar may fall to $1.00.

However, given the "dark clouds" over Europe, Europe is still heavily dependent on energy imports, and the market predicts that it will be difficult for the ECB to keep up with the Fed.

Britain, which has flown solo from the European Union, is no better off.The pound fell to a two-year low after raising interest rates at this week's meeting.The Bank of England has warned that the UK will fall into recession later this year.

Goldman Sachs Group strategists warned on the eve of the meeting that a weaker pound could start to worry the Bank of England. Goldman Sachs Group wrote in a note to clients: "at some point, the mentality of 'currency war' may become more common in the thinking of the Bank of England, and the weak pound will lead to a darker inflation outlook."

The SNB, known as a "currency fighter", also had to change its attitude of "not allowing the Swiss franc to appreciate significantly". Andrea Maechler, a board member of the SNB, said this week that a strong Swiss franc would help fight inflation. Depending on it this year, inflation in Switzerland has risen somewhat, but far below that of its neighbour, the euro zone.

With the yen falling at an accelerated pace, can Japan still adhere to the ultra-loose policy?

In Asian markets, the BoJ is largely unafraid of the depreciation of the yen, sticking to an ultra-loose monetary policy even as the yen plunges historically. But as the yen accelerates its declineThere are more and more voices in the market that Japan's Ministry of Finance is likely to boost the yen for the first time since Japan entered the market in 1998.

In addition, the stronger dollar has created problems for emerging market countries, especially those that hold large amounts of US debt.

"the rise in the dollar is part of the reason why investment in emerging markets is very limited today," said Rick Rieder, chief investment officer of Blackrock's global fixed income division. Because it's a big risk. Today, dollar debt in many emerging markets is large, not only at the sovereign debt level, but also at the corporate level. "

Karl Schamotta, chief market strategist at Corpay, a payments company, says the pressure is another reminder that, in the words of John Connery, former US Treasury Secretary, in the early 1970s,The dollar is "our currency, but your trouble".