U.S. Dollar Index Positioning The U.S. Dollar Index long positioning being in the 95th percentile indicates an extremely bullish sentiment towards the U.S. dollar, potentially indicating that it is overvalued. Image: Morgan Stanley Research
Change in U.S. Dollar vs. Change in S&P 500 EPS While there are instances where the U.S. Dollar and S&P 500 EPS may move in tandem, the overall statistical relationship is weak. Image: Morgan Stanley Research
Euro to U.S. Dollar (EUR/USD) The euro has dropped to a two-year low against the dollar due to concerns over a weak European economy, exacerbated by U.S. tariffs and anticipated interest rate cuts by the European Central Bank amid political instability. Image: Bloomberg
U.S. Dollar – Share of Global Currency Reserves Despite some countries seeking to reduce their dependence on the U.S. dollar, it remains the dominant global reserve currency, accounting for 58% of total reserves, significantly surpassing the euro at 19.8% and the yen at 5.6%. Image: Bloomberg
Euro to U.S. Dollar (EUR/USD) The euro is under considerable downward pressure, experiencing its worst month in more than a year, largely due to worries about potential U.S. trade tariffs and a weakening economic outlook for the Eurozone. Image: Bloomberg
Euro to U.S. Dollar (EUR/USD) Goldman Sachs holds a pessimistic view on the EUR/USD currency pair, indicating that the euro is expected to depreciate against the U.S. dollar over the next 3 to 6 months. Image: Goldman Sachs Global Investment Research
Real Returns for U.S. Dollar-based Assets by Quarter Century While there have been periods of volatility and negative returns, real stock market returns over the past 25 years have been positive and in line with long-term historical averages. Image: Deutsche Bank
U.S. Dollar – Overall Weighted Valuations Ranked The U.S. dollar is considered the second most overvalued liquid currency globally, based on three valuation metrics: Purchasing Power Parity (PPP), Behavioral Equilibrium Exchange Rate (BEER), and Fundamental Equilibrium Exchange Rate (FEER). Image: Deutsche Bank
U.S. Dollar Index and Rest of the World GDP A weaker U.S. dollar typically bodes well for the global economy by boosting growth prospects, improving trade dynamics, and encouraging investment in international markets. Image: BofA Predictive Analytics
U.S. Dollar Forecast BofA’s outlook suggests a continued decline of the U.S. dollar until the end of 2025, driven by anticipated interest rate cuts and changing global economic conditions. Image: BofA Global Research
S&P 500 vs. U.S. Dollar Index A recovery in risk sentiment and higher equity prices has coincided with a weakening of the U.S. dollar, suggesting that investors are shifting their preferences towards riskier assets. Image: Goldman Sachs Global Investment Research