Impact Of The Rising US Dollar

The Real Estate Espresso Podcast

Impact Of The Rising US Dollar

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Impact of the Rising US Dollar

Welcome to the Real Estate Espresso podcast, your morning shot of what’s new in the world of real estate investing. I’m your host, Victor Menasce. On today’s show, we’re discussing the impact of the rising US Dollar.

The dollar has appreciated significantly against many major global currencies since November started, which coincided with the most recent Fed announcement. The US-dollar, recognized as the world reserve currency, is not only universally accepted but also in demand as the most stable and valuable financial asset. Although attempts to replace the dollar have been made and will continue to be made, no reserve currency has ever maintained that position indefinitely.

Part of the reason the US-dollar fell earlier this year was because the Fed projected seven rate cuts for 2024. However, there were ultimately only four rate cuts. Other countries were slashing rates faster than the US.

Markets are driven by anticipation, not just what has happened historically. When the Fed lowered their expectation for rate cuts in 2025, they signaled to the market that rates would be higher for a longer period in the US.

Currently, several major economies, including Canada and countries in Europe, are in recession. Due to the weak labor market and high unemployment rate, Canada is reducing its rates. In such a scenario, the US Treasury may appear comparatively more attractive due to a higher interest rate.

Alongside this, a rising US dollar could present opportunities for US investors to make profitable investments elsewhere globally. This might include purchasing high-yield investments like British gilts. However, not every place in the world is an excellent spot to invest. But there are still some very promising investment opportunities out there.

For instance, a sizable amount of investment capital is flowing from the U.S. into Canadian real estate projects, which presents a stable market with significant supply and demand shortages. My development firm, YStreetCapital, is just one company that offers development projects in both the U.S. and Canada.

So, as you go about your day, take this into consideration. Go out and make some great things happen.

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