The U.S. dollar is at its strongest value relative to the Japanese yen and British pound since the 1980s and trading on par with the euro for the first time in nearly two decades. The driving force behind the rising strength of the dollar is U.S. monetary policy — as the Federal Reserve raises interest rates to curtail inflation, it also pushes up the price of the dollar. The Bank of Japan, the Bank of England, and the European Central Bank have also raised interest rates, albeit less aggressively than the Fed. 

Russia’s invasion of Ukraine also spurred an inflow of capital into the U.S., raising demand for dollars as global investors consider the U.S. a safer haven than Europe, the U.K. or Japan. The U.S. economy has recovered from the pandemic more quickly compared to other countries; its GDP is now 15.6% higher than the third quarter of 2019. In comparison, the eurozone’s GDP grew by 8.3% and Japan’s declined by 3.6%, over the same period.

The strength of the dollar will help U.S. inflation as it lowers the cost of imports. But it also has drawbacks, as American products become more expensive in international markets and emerging economies like China and India pay a higher dollar price for commodity imports.

Rising global inflation is widening the gap between salary increases and costs of living worldwide, leading to a loss of purchasing power for employees. As companies look to entice new and remote workers, which cities are most likely to attract and retain top talent?

The cities with the lowest cost of living and the highest quality of life are Vancouver, Toronto, Stockholm, Lisbon, and Frankfurt, according to Mercer’s recent Quality of Living Survey 2021-2022. The city with the highest cost of living is Hong Kong, followed by four cities in Switzerland: Zurich, Geneva, Basel, and Bern. Tel Aviv ranked sixth, with New York City coming in seventh place. 

Cities with a higher cost of living did not necessarily have a higher quality of life: Hong Kong, for example, scored lower on quality of living than other locations. Cost of living was measured by comparing 200 expenses like food, housing, household goods, and more. Quality of life was measured by housing affordability, safety, education, eco-friendliness, and other factors.

The U.S. West Coast has endured record-breaking high temperatures in September as a heat dome trapped hot air over the region. On September 7, more than 61 million people were under extreme heat advisories in California, western Arizona, and southern Nevada. The heatwave fueled wildfires and stressed the power grid, as temperatures reached triple digits throughout the region before Tropical Storm Kay brought relief over the weekend. 

NASA scientists studying Southern California heat waves found that they are becoming more intense, more frequent, and longer-lasting. “If you look at the sheer magnitude of all-time high temperatures that were set — in any month, in any year — this heatwave is definitely unique,” Brian Kahn, an atmospheric scientist at NASA’s Jet Propulsion Laboratory, told NASA’s Earth Observatory. 

Extreme heat is becoming more common across the world, as climate change intensifies weather patterns. This summer alone, heatwaves rippled through Europe, North Africa, the Middle East, and Asia. The U.N.’s Intergovernmental Panel on Climate Change warns that the world has until 2030 to reduce carbon emissions by 43%, or the goal of limiting global warming to 1.5 degrees Celsius will be out of reach.

Housing sales in the U.S. have sunk to their lowest point since May 2020, declining by 5.9% in July. This is the sixth consecutive month that sales have declined, reflecting the impact of rising mortgage and interest rates. This is the first U.S. housing downturn since the Great Financial Crisis in 2007-2008.

Some experts project that housing sales may soon stabilize, as the mortgage rate falls from 6% in June to 5%. “Home sales may soon stabilize since mortgage rates have fallen to near 5%, thereby giving an additional boost of purchasing power to home buyers,” said National Association of Realtors Chief Economist Lawrence Yun in Trading Economics.

But researchers at Goldman Sachs project that the housing market downturn will continue into 2023. They predict that this year, new home sales will drop by 22%, existing home sales by 17%, and housing GDP by 8.9%. Despite the downturn, housing prices are expected to remain high due to inflation and a limited inventory of homes.

The United Kingdom’s new prime minister Liz Truss is under pressure to ease energy costs, as natural gas prices skyrocket and winter approaches, reports The Economist. 

On August 26, energy regulator Ofgem reset its energy price cap, raising the average household’s monthly energy bills from 164 pounds ($194) to 296 pounds ($340), starting in October. Forecasts from Cornwall Insight consultancy group predict that without government intervention, energy bills will rise to 449 pounds ($516) in January and 551 pounds ($633) in April. Without government support, experts estimate that energy bills will make up 14% of the poorest fifth of households’ spending — double the amount before the pandemic. Middle-income households will also face steep prices, with 9-10% of their spending consumed by energy costs.

In response, Prime Minister Truss announced that energy bills will be capped for all households at 2,500 pounds ($2,874) a year — about $240 a month — until 2024. Businesses will also benefit from the price cap, though for a shorter period of six months.