Latest news with #weakerDollar
Daily Mail
08-07-2025
- Business
- Daily Mail
US dollar in danger after worst half-year since the 1970s... here's how it'll shrink your wallet
America's currency just had its worst half-year performance since the Nixon era. That could mean higher prices for everyday Americans. The dollar dropped more than 10 percent against major global currencies from January to June, according to the US Dollar Index. It's the worst first-half showing since the index began tracking the greenback in 1973. For decades, the dollar has served as the world's financial safe haven. Economists warn the weaker dollar could keep inflation stubbornly high, even as consumer prices cool in other areas of the economy. 'A depreciation in the US dollar is inflationary,' Ryan Sweet, the chief US economist for Oxford Economics, told Newsweek. 'The depreciation in the dollar increases the risks that tariffs boost consumer prices more than anticipated this summer and into the fall.' Take, for example, the cost of car parts from best-selling Japanese brands like Toyota, Honda, and Nissan. When the dollar weakens against the Japanese Yen, it takes more dollars to buy the same part from an overseas supplier. That can push up Americans' repair bills, parts prices, and insurance. It also increases manufacturing costs in the US, where many factories depend on globally sourced components. Similar price pressures are showing up in other industries that rely on imports — like food, electronics, and clothing. Coffee from Colombia, apparel from Vietnam, and even roses from Ecuador — all products that have nearly no US manufacturing — can become more expensive and trickle down to consumers at the checkout line. Bret Kenwell, US investment analyst at eToro, told there is a mix of good and bad with the dollar's dip. 'A falling dollar can be a good thing for large multinational companies, as it boosts their earnings in non-dollar currencies,' he said. 'However, importers can struggle as it now takes more dollars to buy the same goods as before. For these reasons, many companies look to hedge their currency exposure — especially in volatile environments.' While a weaker dollar may help exporters compete abroad, it's also reshaping how everyday investors move the money in their portfolios. A new survey from trading platform eToro found that 58 percent of American retail investors are adjusting their portfolios in response to the dollar's decline. More than a quarter are pulling back from US stocks and shifting into gold and cryptocurrency — two assets often viewed as hedges against inflation and currency risk. Younger investors were especially bullish on gold, the survey found. Trust in the US market is also starting to slip from all-time highs. The dollar has traditionally been seen as safe haven currency for international investors. But rising national debt, increased inflation, higher interest rates, a wobbly political landscape, and a focus on US manufacturing has chipped away at its long-term dominance. Some creditors are even worried the US might not be able to service some of its debts. But top White House advisors say the dollar's long-term strength has come with tradeoffs for US jobs. Vice President JD Vance has frequently said that dollar dominance has had the reverse impact on countries that want to buy goods built in the US. A Ford F-150 built in Michigan, for instance, costs significantly more for a customer in Japan than for one in the States. 'If you want to employ a lot of people in manufacturing, you need to make it easier for us to export and not just import what we need,' Vance told Politico.
Yahoo
25-06-2025
- Business
- Yahoo
More retail investors are turning to gold & crypto. Here's why.
Retail investors are shifting their portfolios as concerns about a weakening US dollar (DX=F, grow. Bret Kenwell, eToro US investment analyst, joins Wealth to explain why retail investors are increasingly turning to gold (GC=F) and crypto as alternative assets. To watch more expert insights and analysis on the latest market action, check out more Wealth here. A new survey on retail investors shows a majority have adjusted or plan to adjust their portfolios to invest in more gold and crypto amid concerns over a weakening dollar. Here with more, we've got Brett Kenwell, who is the eToro US Investment Analyst. Brett, good to have you. So, just tell us more about how retail investors are thinking of gold and crypto, commonly known in Bitcoin's case, historically as digital gold, as a kind of hedge to some of the uncertainty that we've seen. Yeah, Braden, thanks for having me. I think, you know, when you look at retail investors, um, you know, sort of one characteristic that really jumps out to me about the group is they tend to be opportunistic. Um, in this case, we have, you know, we were kind of surveying them specifically about certain risks, one of them being a weaker dollar, and their response to that was to allocate more of their portfolios to gold and crypto, um, specifically in that order. But I think, you know, when we kind of zoom out, be it for Q2 or really for the year, um, you know, they've seen how well some of these different asset classes have performed, and I think that has really been a motivating factor for for retail to sort of, you know, step back and zoom out and and reassess how they want to have their their portfolios positioned. Yes, it's still a majority into US stocks, and that is, um, a favorite asset class for them to hang out in. I I believe that will be the case for the foreseeable future, but things like gold, um, Bitcoin, even international equities, have have certainly gained traction with retail. I thought the findings from the survey were really remarkable in the differences and how different demographics, age demographics are looking across this. What was the breakdown there that really netted out? Yeah, you know, I I don't think it'd be too surprising to your viewers to hear that, um, the younger side of retail investors, so your Gen Zs, your millennials, um, even Gen X is more has a more favorable stance towards, uh, crypto and Bitcoin than, you know, our boomers and silent generations, some of our older, more classical investors, but I think what at least what stuck out to me was that the younger generation was also more favorable towards gold than the older generation. So I think, again, that is sort of a, you know, a tell on how social, uh, social media, how the news, how media kind of influences younger investors and how they're digesting their information and and where they're getting it from. Um, because, you know, gold has done so well, not just this year, um, as a safe haven, uh, investment, safe haven asset when when volatility is very high and stocks were doing poorly, but gold has actually outperformed the S&P 500 in three of the last five years, and is on track to do it again this year, provided, you know, the second half isn't too wild. Um, so I think I think they see that, and they view that as an opportunity. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Bloomberg
13-06-2025
- Business
- Bloomberg
King Dollar's Crown Wobbles. Brace for Fallout.
The dollar is supposed to be the natural haven in times of global stress, yet the lack of flows into US assets after Israel's airstrikes on Iran is telling. The dollar index hit a three-year low Thursday before the military strikes, but that it's rebounded only about 0.5% subsequently suggests the 10% loss of relative value this year of the greenback to other major currencies may persist. Gold and oil both rose sharply so it's not that geopolitical risk doesn't matter. A weaker dollar has consequences globally, especially if that is being undermined by a lack of confidence. What is different about the weaker dollar this year is that it's not being driven, as is more normal, by interest-rate expectations. Nor is it being repriced by a sudden glaring relative growth differentials. Although the noise around tariffs can seem deafening, what is most impairing the dollar is its burgeoning budget deficit and more volatile political backdrop. Large government borrowing typically leads to a weaker US currency as inflation pressures pick up.
Times of Oman
23-05-2025
- Business
- Times of Oman
US dollar is now on a long-term downward path: Jefferies
New Delhi: The US dollar has likely to be entered in a long-term downtrend because of several economic and political factors that suggest a weaker dollar in the coming years, according to a report by Jefferies. The report highlighted that on 24 December last year, America reached an all-time high of 67.2 per cent share in the MSCI All Country World Index. This was during a time of strong optimism and talk about "American exceptionalism." Jefferies noted that this level was already close to breaking out on the charts, and now the breakout has finally happened. However, the report clarified that this does not mean the US stock market will collapse. The issue is that the US holding 67 per cent of the index is unusually high. This is especially significant because the US accounts for only 26.4 per cent of the global economy in terms of nominal GDP in US dollar terms and just 14.9 per cent based on purchasing power parity (PPP). Even when taking into account the large global presence of American tech companies, the number still seems inflated. This large gap suggests that the US dollar is now on a long-term downward path. Jefferies said "There are several reasons to bet on a weaker dollar. One not unimportant one is that Donald Trump himself wants a weaker dollar". One reason to expect a weaker dollar, according to Jefferies, is that US President Donald Trump. The report stated that his unpredictable style of governance and frequent policy changes, especially on tariffs, create uncertainty in the market. This kind of unpredictability can result in a natural discount on the dollar's value. But the biggest reason, the report mentioned, is the worsening financial condition of the US after the Covid pandemic. The Federal Reserve's generous policies have added to this problem. The result could be a rise in financial repression, possibly leading to yield curve control and even exchange controls in the future. This growing gap in savings and the US's increasing debt levels are strong signs that the dollar may continue to weaken in the long run.
Yahoo
16-05-2025
- Business
- Yahoo
Investors Could Increase Protection Against Weaker Dollar
Investors could take increased protection against losses stemming from a weaker dollar given that global portfolios are heavily invested in U.S. companies, Swissquote Bank analyst Ipek Ozkardeskaya said in a note. Investors previously didn't feel the need to hedge against a weaker dollar because in times of market volatility the currency typically strengthens on safe-haven flows. "But recently, the dollar has been weakening despite rising volatility, and the latter increases hedging costs, leading to an unusual negative correlation between the dollar and volatility."
