After years of strength, the US dollar has weakened during 2025, reflecting moderating growth, shifting trade flows and a return to fair value.
According to Madison McCall and Claire Hsu, Multi-Asset Product Management Specialists at Vanguard Europe, the move signals a turning point for global portfolios. A strong dollar has long boosted returns for sterling-based investors, but as its valuation normalises, that tailwind is fading.
They note that diversification and currency management are now key. Keeping global equities unhedged while hedging global bonds can smooth volatility and preserve exposure to global growth.
In a more balanced currency environment, long-term success may depend less on dollar strength and more on disciplined portfolio construction.
Read the full article to explore how currency shifts are redefining multi-asset balance.
