When the investing climate changes and the value of the US dollar declines, the CEO and founder of one of the biggest independent financial advice, asset management, and fintech organizations in the world advises that global investors may want to reevaluate their holdings.
Nigel Green of deVere Group is one of an increasing number of financial industry experts who believe that the value of the US dollar is going to decline in the near future relative to all of the major currencies this year, according to information shared with Finbold on February 24.
“Since 2011, the dollar has been on a relentless tear. The greenback’s bull cycle impacted almost every asset class on a global level.”
“It was ramped up further over the last 12 months and hit generational highs. This was due to sharply and quickly increasing interest rates in the US – way ahead of other central banks around the world – and heightening geopolitical tensions triggered a flight to the safety and liquidity of the dollar. But many of the drivers that have pushed the dollar seem to be coming to an end”
Fed expected to slow rate hikes
Green observes that the Fed’s more aggressive interest rate raise plan is now being followed by other central banks throughout the globe. At the same time, it seems like the Fed will slow its rate hikes over the next several quarters.
Furthermore, the magnitude of the US government’s massive budget deficits is highlighted by the current debt limit situation. According to the CEO, the US dollar is in a transitional period between bull and bear markets. The global investment climate will undergo a dramatic change as a result of this.
The CEO of deVere Group pointed out:
“The dollar’s decade-long rally is coming to an end and this is going to impact global investors, who should now be re-evaluating their portfolios to seize the opportunities in a new cycle.”
According to Nigel Green, the performance of stock markets outside of the United States, especially those in developing economies, is often favorable when the value of the dollar is lower.
He goes on to say that big cap companies in the United States as well as international corporations, are expected to perform well as well due to the fact that a significant portion of their income are produced in nations where the currencies are growing stronger.
Energy and industrial commodities are examples of industries that are likely to benefit from a decline in the value of the dollar. This is due to the fact that these products are priced in dollars and, as a result, become more affordable for purchasers based in countries other than the United States when the dollar falls in value.