Dollar surge leaves trail of destruction | Mount Equity Group Tokyo Japan

U.S. dollar notes are seen in this November 7, 2016 picture illustration. REUTERS/Dado Ruvic/Illustration

LONDON, April 29 (Reuters) – The dollar’s race to two-decade highs is leaving a trail of destruction in its wake, exacerbating inflation in other countries and tightening financial conditions just as the world economy confronts the prospect of a slowdown in growth.

This year’s 8% gain against a basket of currencies is driven partly by bets that the U.S. Federal Reserve will raise interest rates faster and further than other developed countries, and partly by its status as a safe haven in times of turbulence.

It is also supported by Japan’s reluctance to ditch its super-easy policies, and fears of recession in Europe.

Here are some areas affected by the dollar’s muscle-flexing:

Fx returns1

1/EXPORTS

Currency weakness…