from memorandum :
The U.S. dollar strengthened sharply against many industrialized and emerging market currencies, reaching a 20-year high. For most countries, especially emerging market economies, the appreciation of the dollar is seen as a major global challenge. In the past, many countries would accept a strong dollar; in fact, emerging market countries like China often intervene in the foreign exchange market, hoping to gain a trade advantage by devaluing their currencies. But today, for a variety of reasons, developed and emerging countries alike are grappling with further devaluation of their currencies.
Here is the diagram from the memo:
This is the inflation-adjusted U.S. dollar time series starting in 1973.
figure 1: The real value of trade weighed on the dollar against a basket of currencies. Trade weights for goods before 2006M01, trade weights for goods and services. The NBER uses shades of grey to define the peak and trough dates of the recession. Source: Fed by FRED, NBER, and author’s calculations for spliced series.
