Stronger US Dollar Inspires Finding Value Abroad Ideas

The US dollar’s performance undoubtedly attracts investors to favour it above most financial assets and rival currencies. This seems natural as most foreign currencies are now weak. Over the passage of several months in 2022, markets have noticed that European companies underperformed US peers by a significant margin. The same applies to Japanese businesses as well.

So, it is not purely a matter of economic expectations, rather, the stronger currency affects the whole investment scene. Currency effects contributed to a 20% decline YoY in valuation for companies that operate with the Euro.

Just like how the normal tourist travels to countries where the US dollar can buy the ultimate leisure for longer, these currency effects will have interesting effects on the investors’ total return on investment.

There are two major ways US investors can take advantage of the strong dollar. First, by purchasing foreign assets at a reduced price. Or, by buying foreign exporters, regardless of price, and watch their financial performance increase.