A Dividend Investor's Strategy: How To Short The Strong Dollar In 2025

2025-01-16 14:15:29 ET

Summary

• The dollar is extremely strong in context to history, posting a +7% year in 2024 versus a basket of international currencies.
• If domestic US measures cannot be devised to weaken the dollar, the trade deficit may continue to expand.
• This article reminisces on the 1985 Plaza Accord, where global intervention to weaken the dollar in agreement with trading partners was instituted.
• Shorting a currency can be as simple as buying a foreign currency, real estate, bonds or stocks that are depressed relative to the currency anticipated to fall.
• This article discusses some cash flowing ideas for foreign currency dividend paying stocks and funds that could have a layer of currency return if you believe the dollar has reached its peak.

The US Dollar is on a bull run

2024 was another strong year for the US Dollar, strengthening over +7% versus a basket of International currencies, one has to wonder, how long can this last? It's not that I don't believe that the US Dollar shouldn't be the world's strongest currency, it's simply a bet on the inevitability of a mean reversion and the fact that the incoming Trump 2.0 administration wants to eat away at trade deficits while on-shoring more manufacturing. ...

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