Currency moves explainer: The causes and impact on portfolios and the options for action

Can be biggest risk

clock • 5 min read

In mid-July, the euro and the dollar hit parity with $1 equivalent to €1. Then the euro fell below the dollar for the first time in nearly 20 years.

While currency fluctuations are always around, there have been some starker, more significant shifts in recent months and it is important for investors to understand what is causing these changes, how it is impacting portfolios and what changes they may need to make as a result. The causes Currencies shift for all sorts of reasons, including sentiment, economic data points, central bank policy trade flows and more. In the current scenario, interest rate rises are playing a significant role and "any hint of policy moves from central banks are being scrutinised instantly, causing big ...

To continue reading this article...

Join Investment Week for free

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now

 

Already an Investment Week
member?

Login

More on Currencies

Four Graphs explaining sterling

Four Graphs explaining sterling

Four experts write

Investment Week
clock 09 January 2024 • 3 min read
BoE's Jon Cunliffe: Digital pound likely needed by 'end of the decade'

BoE's Jon Cunliffe: Digital pound likely needed by 'end of the decade'

Concerns around privacy remain

Cristian Angeloni
clock 27 October 2023 • 3 min read
Four Graphs explaining currencies

Four Graphs explaining currencies

Four experts write

clock 25 October 2023 • 2 min read
Trustpilot