U.S. dollar enthusiasm shows no signs of weakening

Sources: Bloomberg and Wells Fargo Investment Institute. Daily data from January 1, 2014 to September 30, 2022. The DXY Index measures the value of the U.S. dollar relative to major developed market currencies, notably the euro, the Japanese yen, and the British pound. Fed = Federal Reserve. ECB = European Central Bank. QE = quantitative easing. DXY = U.S. Dollar Index. An index is unmanaged and not available for direct investment. Past performance is no guarantee of future results.

Key Takeaways

  • We expect the macroeconomic and interest rate advantages of the U.S. to continue to push the dollar higher against developed market currencies. The dollar’s status as a higher-yielding perceived “safe-haven” currency should also support.
  • Emerging market currencies may be better supported than developed market currencies, but are unlikely to broadly outperform the dollar.