NEW YORK, Dec 8 Reuters A breathtaking surge in the U.S. dollar trampled foreign currencies, gouged corporate profits and gave investors one of the years few winning trades. Though the greenback has stumbled in recent weeks, recession worries may keep it elevated in 2023.

At its September peak, the dollar the pace of the rate increases that helped fuel the dollar39;s gains.

While rising U.S. yields were a key catalyst for the dollars rally, other factors played an important part in boosting the buck. Investors flocked to the dollar  a popular destination during uncertain times to shelter from market volatility spurred by surging global inflation, spiking energy prices and Russias invasion of Ukraine.

Also heightening the dollars allure was the comparative strength of the U.S. economy during a time when fears of an energy crisis hammered European assets while stringent COVID19 controls hurt China39;s growth.

Even after paring some of its gains, the dollar is still on track for its best year since 2014. Fund managers surveyed by BoFA Global Research named it the market39;s most crowded trade for the fifth straight month in November and a record number of survey participants said the currency was overvalued.

Still, a Reuters poll of 66 foreign exchange strategists suggested the dollar will trade at its current level around a year from now, with many expecting global central bank policy tightening to hurt growth and boost the greenbacks safehaven appeal once again.

WHY…