Top dollar: The US dollar has been getting stronger

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I need a dollar, dollar

The dollar in your pocket might buy a little less at the grocery store thanks to inflation, but if you travel abroad you may actually find it going further than you expected, as the US dollar continues to strengthen against other major currencies.

At the time of writing, one euro is worth just $0.99, a two-decade low for the European currency, while one British pound is worth just $1.15 — the lowest level for GBP since 1985. The recent moves follow a stand-out performance for the dollar in August, when it was the second best-performing global asset for the month only behind natural gas.

Ahead of the curve

The Federal Reserve's continuing support for steep interest rate hikes, in a bid to curb inflation, has been more aggressive than in other regions. That's been attractive to investors seeking higher rates on their cash, and is likely to continue given the Fed's firm stance on taming inflation.

A stronger dollar isn't strictly a good, or bad, thing. Importing goods from abroad is now relatively cheaper for Americans, but if you're selling abroad your prices are now likely less competitive than they were a few months ago.

Interestingly, USD isn't the best performing global currency — the Zambian Kwacha has gained 18% against the dollar this year.

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Top dollar: The US dollar has been getting stronger