The Dollar Surges — US Currency Posts Strongest Monthly Gain in a Year

The US dollar is on track for its strongest monthly gain in nearly a year, surging on safe-haven demand and expectations the Fed will delay rate cuts. Central banks worldwide face impossible choices: raise rates to defend currencies (crushing growth) or accept depreciation (fuelling inflation). Gold has paradoxically declined as dollar bonds become more attractive.

The dollar rally threatens the cedi's 2025 appreciation — a key factor in yesterday's S&P credit affirmation. If the cedi depreciates 10-15% in Q2, imported inflation spikes, the rate cut becomes untenable, and the recovery narrative collapses. The BoG must preemptively defend the cedi through coordinated dollar sales from the $11B reserve buffer.