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What investors need to know when the dollar falls

Any sustained move in the world's pre-eminent currency has implications for your strategy

By Paul Wallace   November 2020

Image: Pixabay

America has lost the overwhelming economic lead it enjoyed in the aftermath of the Second World War, but it still has the world’s pre-eminent currency. The dollar constitutes over 60 per cent of official foreign exchange reserves; is used extensively in global trade, notably in commodities such as oil; and is especially favoured by borrowers outside the US raising funds in a foreign currency. Any sustained move in the dollar has implications for investing strategies.

In troubled times, the dollar typically strengthens as investors…

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