Dollar Strength

Definition ∞ Dollar strength refers to the relative value of the United States Dollar compared to other major currencies in the foreign exchange market. A stronger dollar indicates it can purchase more of other currencies, influencing global trade, investment flows, and the pricing of commodities. This metric is a significant indicator of macroeconomic conditions and capital market sentiment.
Context ∞ The current discourse on dollar strength is often linked to global inflation rates, central bank monetary policies, and geopolitical stability, all of which can impact its standing relative to other fiat currencies. A robust dollar can exert downward pressure on risk assets, including cryptocurrencies, as investors may shift capital towards perceived safer havens. Conversely, a weakening dollar can sometimes correlate with increased investor appetite for alternative assets.