Unhedged The incredible shrinking dollar
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Jan 29, 2026 Discussion of why the dollar has been steadily weakening since 2017 and what that means for global returns. Debate over eroding trust in US policy, deficits and geopolitical confidence. Explanation of how currency hedging can amplify dollar moves. Examination of recent yen volatility, possible US involvement, and implications of the next Federal Reserve chair.
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Trust Problems Drive Dollar Weakness
- Recent rhetoric and erratic policy from the US eroded global trust in the dollar.
- Robert Armstrong links weak sentiment to comments from Trump and mixed US official signals.
Hedging Can Amplify Dollar Slides
- Hedging against expected dollar falls creates selling pressure that compounds weakness.
- Robert Armstrong explains a vicious cycle: weakness prompts hedging, which pushes the dollar down further.
Hedge Currency Risk On US Assets
- Protect foreign returns by hedging currency exposure when you own US assets.
- Katie Martin warns investors who ignore currencies risk seeing returns erased by dollar moves.