UBS forecasts a continued depreciation of the US dollar and recommends investors reassess their portfolios. The bank anticipates a mid-term decline in the dollar due to narrowing interest rate advantages and increasing fiscal deficits. Since June, the dollar has fallen by 5%. UBS advises investors to adopt strategies such as currency hedging, diversifying into other currencies, and investing in assets like gold to mitigate risks.
These recommendations are particularly pertinent in the current economic climate, where geopolitical tensions and monetary policy decisions are creating uncertainty in global markets. Investors are encouraged to carefully evaluate their exposure to currency risk, considering not only traditional hedging techniques but also alternative investments that can offer better protection against the dollar’s depreciation.
As fiscal deficits rise and interest rates fluctuate, maintaining a diversified portfolio may become essential for safeguarding wealth. Furthermore, exploring investments in precious metals such as gold could provide a safe haven, as they historically retain value during times of currency instability.
UBS’s insights serve as a timely reminder for investors to remain vigilant and responsive to changing economic conditions..