Weak Dollar, Strong Opportunity: Why International Value Matters Now

The US dollar is down roughly 11% year-to-date (YTD), marking its steepest slide in the first six months of a calendar year since the early 1970s.¹ With the effects of new US policy still unfolding and the impact on growth and interest rates uncertain, many investors are turning to international markets. 

International value equities are increasingly standing out. As foreign currencies like the euro and pound have rallied, earnings and dividends from international companies have become more attractive when translated back to US dollars. This currency boost, combined with historically low valuations, gives international value stocks a solid advantage. 

Despite US mega-cap growth dominating headlines, performance data tells a different story. International equities began the year strong with the MSCI EAFE gaining roughly 19%, while US markets lagged, with the S&P 500 gaining around 6% YTD. After years of US outperformance, many investors saw their US allocations become a larger portion of their portfolios than intended. With a shift to international equities, investors may be increasing global exposure, signaling growing conviction in markets abroad.

Changes in Dollar Strength Have Prompted Shifts in Relative Equity Performance
Index Price Return During Various Currency Regimes, January 1980 through June 2025