We expect a stable to weaker dollar in 2022

Sources: Bloomberg and Wells Fargo Investment Institute. Daily data from January 1, 2014 to September 30, 2021. 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

  • The dollar may remain relatively well supported into year-end. But as U.S. growth slows a little to converge with the eurozone, we see a somewhat lower dollar trading range for 2022.
  • As global growth becomes less U.S.-centric, a recovery in trade and an increase in vaccinations should allow emerging market currencies to benefit from the stable-to-weaker dollar that we anticipate.