The US Dollar Looks Expensive on a Range of Measures

Our charts shows three different metrics to evaluate the relative expensiveness of the US dollar, based on inflation differentials (PPP valuation), rates differentials (IRP valuation) and macro situation differentials, as measured by our proprietary Nowcasters (macro valuation).  When positive (resp. negative), these metrics indicate the US dollar is expensive (resp. cheap) by x%. Here, on average, it is around 7% overvalued compared to other developed market currencies. In our opinion, the prospects for the US dollar look less promising than a couple of years ago.

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