Is the dollar’s stumble a sign of things to come?

Capital Group
By December 3, 2020 14:34

Is the dollar’s stumble a sign of things to come?

Investment Insights 

Is the U.S. dollar entering a new multiyear bear cycle, or is it just experiencing an episode of weakness in an already decade-long bull run? It’s a question at the top of investors’ minds given the dollar’s steady decline since the outbreak of COVID-19 earlier this year.

Dollar cycles typically last for many years. Shifts between bull and bear cycles tend to develop very slowly, and there are often false starts. While it is too early …

Key Takeaways

  • Recent U.S. dollar weakness may be signalling the end of a nearly 10-year dollar bull cycle.
  • Key drivers include lower U.S. Treasury real yields, a large fiscal deficit and potential deglobalisation.
  • Investors can position for dollar weakness through unhedged global bond strategies.
  • Other strategies with foreign currency exposure, such as emerging markets debt, may also benefit from a weaker dollar.

Asset Manager

Capital Group is one of the largest and most experienced investment management companies in the world

Capital Group is in 1931 opgericht in de Verenigde Staten en een van de grootste onafhankelijke vermogensbeheerders ter wereld met een actief beheerd vermogen van meer dan $2,1 biljoen. We doen alleen vermogensbeheer. Al 90 jaar is het ons primaire doel om een consistent en superieur resultaat te realiseren voor langetermijnbeleggers.

Feike Goudsmit
Managing Director, Institutional
Tel: +31 (0) 20 797 7575

 LinkedIn: capital-group-europe

Capital Group
By December 3, 2020 14:34


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