After the SNB, more central banks may follow suit in cutting interest rates; the US dollar's advantage in the context of strong US economic growth is once again showing.
On Friday, as the US dollar continued to strengthen, Asian currencies fell across the board.
The Korean won led the decline. The exchange rate of the won against the US dollar once fell 1.3%, the biggest decline since the beginning of February.
The exchange rate of the Thai baht against the US dollar once fell by 1.2%, the lowest level in 5 months.
The offshore renminbi fell below 7.25 against the US dollar and fell about 300 points during the day. The current report is 7.2510.
Just the day before, the SNB unexpectedly announced a 25 basis point cut in interest rates, becoming the first developed economy in the G10 to cut interest rates after a long period of high inflation.
The SNB's unexpected interest rate cut fueled global risk market sentiment, and the dollar's advantage in the context of strong US economic growth was once again evident.
The dollar rose 0.6% on Thursday and continued to strengthen on Friday.
Karl Schamotta, chief market strategist at Corpay in Toronto, said that the Swiss central bank's relaxation of monetary policy indicates that inflation has been brought under control, and other central banks will soon adopt more relaxed policies, which has boosted the dollar.
Indeed, the US remains the only market in the world that offers higher nominal and real returns than any other major economy.
Given people's optimism about the direction of the US economy, the current flow of currency into the US is still largely unstoppable.
In the economic forecast released earlier this week, the Federal Reserve sharply raised the US GDP growth forecast for 2024 to 2.1%.