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Opinion
John Authers

Goodbye Weak Dollar, Hello Emerging Market Crisis?

Potential pressure will be considerable if the U.S. currency begins to regain strength.

The weak dollar dividend never arrived. Blame Covid.

The weak dollar dividend never arrived. Blame Covid.

. Photographer: Taylor Weidman/Bloomberg 

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Is the decline of the dollar over? The U.S. currency has been falling steadily ever since the world exited the initial stage of the Covid-19 crisis. It has done so in line with the spectacular decline in real yields. This makes perfect sense. With lower yields, there is lower “carry” to be earned by parking in the dollar, so the currency would be expected to weaken.