Capital IdeasTM
Investment insights from Capital Group
グローバル債券
Andrew A. Cormack
Philip Chitty
Tom Reithinger
Harry Phinney
A sharp decline late last year has left many wondering if the US dollar’s decade-long bull run is coming to an end.
The US dollar is significantly above the long-term average
.png)
Sources: Capital Group, JP Morgan. Data as of 31 March 2023. The real broad effective exchange rate measures the value of the US dollar against a group of developed and emerging market currencies and adjusts for inflation using the Consumer Price Index (CPI). CPI is a commonly used measure of inflation that measures the average change over time in the prices paid by consumers for a basket of goods and services.
A continuing downward trend would be welcome news for investors in non-US bonds and equities, where total returns have been eroded by currency translation effects. And, in many ways, a correction is overdue. From its trough in 2011 to the recent peak in late 2022, the US dollar rose 45% against JP Morgan's inflation-adjusted broad-based basket of developed and emerging market currencies. This has left it overvalued against most major and emerging markets (EM) currencies on a purchasing power parity (PPP) basis.
But these metrics suggest the dollar has been overvalued for quite some time, and valuation alone has not been enough to bring it back down. For a longer-term decline to set in, there must be one or more catalysts. In this piece, we outline a few we are watching that could influence the direction of the dollar.
Past results are not predictive of results in future periods. It is not possible to invest directly in an index, which is unmanaged. The value of investments and income from them can go down as well as up and you may lose some or all of your initial investment. This information is not intended to provide investment, tax or other advice, or to be a solicitation to buy or sell any securities.
Statements attributed to an individual represent the opinions of that individual as of the date published and do not necessarily reflect the opinions of Capital Group or its affiliates. All information is as at the date indicated unless otherwise stated. Some information may have been obtained from third parties, and as such the reliability of that information is not guaranteed.
Capital Group manages equity assets through three investment groups. These groups make investment and proxy voting decisions independently. Fixed income investment professionals provide fixed income research and investment management across the Capital organization; however, for securities with equity characteristics, they act solely on behalf of one of the three equity investment groups.