Invesco's Taylor: The importance of using currency in portfolios

The US dollar has performed well, up more than 7% since the end of 2017, and continues to enjoy a number of supports.

In the developed world, it still provides a positive carry relative to the eurozone, UK and Japan because interest rates are still higher in the US versus elsewhere.  From a flows perspective, a number of emerging market countries have outstanding dollar-denominated liabilities. To fund these liabilities, those exposed countries need to sell their own currency and buy US dollars. To hedge or not to hedge? The assets that benefit the most, and the least This arguably provides a 'backstop' to how far the dollar can fall given these flows will continue for as long as those debt lia...