Weak dollar: prospects and opportunities
Those who travel frequently, invest in the USA, and work internationally, whether involved in imports or exports, have certainly noticed: the dollar is weak and is undergoing a phase of extraordinary criticality against major currencies. By way of example, let’s take the Euro with an inverted strength ratio – from $0.95 for €1 at the end of September 2022 to $1.12 for €1 in mid-July 2023 – and the Mexican Peso (also known as the Spanish dollar), which went from 20 pesos per $1 in August 2022 to less than 17 pesos per $1 in July 2023. Similar considerations can be made for the Colombian Peso, which went from over 5,000 pesos per $1 in November 2022 to less than 4,000 pesos per $1 in July 2022.
The reasons for this weak dollar and currency weakness are manifold, of course. The main reason is the upcoming reversal of trend in the policies of the Fed announced by the recent stop (June 23) and go (July 23).
Weak Dollar but Strong Economy
On the contrary, the main indicators of the US economy indicate a period of particular strength and dynamism for the country:
- Inflation decreasing to 3% (core 4.8%)
- Unemployment rate decreasing to 3.5%
- GDP growth of +2.4%
- Average gross wage increasing between 4% and 5% compared to the $56,420 of 2022
It seems that the Federal Reserve’s (FED) goal of cooling down the economy without pushing the country into a recession is about to be achieved. And to these excellent fundamentals, the effects of the Inflation Reduction Act (IRA) plan will be added in the coming months/years, ensuring US and foreign companies investing in the United States and clean energy a trillion and a half dollars in the next decade (estimated by Goldman Sachs and Credit Suisse, including tax credits). This plan is already having effects in terms of investment decisions by many multinational companies.
The current weakness of the dollar, therefore, appears extraordinarily temporary.
“The strength of a currency is determined by the interaction of a variety of local and international factors, such as supply and demand in foreign exchange markets, central bank interest rates, inflation, domestic economic growth, and the country’s trade balance.”
Why Invest Now in the US Real Estate Market
The weak dollar represents an opportunity for foreign investors. On one hand, due to the reasons mentioned so far, the opportunity lies in the chance to purchase properties “at a discount” (-15% compared to the highs in the Mexican Peso, -17% compared to the Euro, -20% in the Colombian Peso) at the same nominal value expressed in dollars. On the other hand, buying income-generating properties (rented to middle-class working families) ensures an income (practically for life) in dollars, destined to appreciate as exchange rates normalize.
Do you want to seize this dual opportunity?
To find out which income-generating properties are currently available in the US market, take advantage of expert advice. Write to contact@opisas.com to schedule an appointment with a consultant who can guide you in real estate investment according to your needs, possibilities, and desires.
<a href=”https://www.freepik.com/free-photo/coins-with-bill_906778.htm#query=dollaro%20debole&position=29&from_view=search&track=ais“>Image by bedneyimages</a> on Freepik
