Currencies | American Funds

  • Forms
  • MY ACCOUNTS
  • INVESTMENTS
  • INSIGHTS
  • PRODUCTS
  • PLANNING
  • SERVICE & SUPPORT

Currencies

INVESTMENT INSIGHTS  | 
January 2016
 |  FEATURING Joanna F. Jonsson

China, Volatility and Why This Is Not 2008

Portfolio manager Jody Jonsson discusses the role of China’s decelerating GDP and overvalued currency in the latest market volatility.

Watch Video (3:32)

INVESTMENT INSIGHTS  | 
July 2015
 |  FEATURING Wesley K.-S. Phoa , Gerald Du Manoir & Matt Miller

Europe Showing Signs of Recovery

Two portfolio managers discuss Europe’s progress in the recovery cycle and how currency and valuations shifts have created investment opportunities.

Watch Video (3:54)

INVESTMENT INSIGHTS  |  Mon Jun 01 13:38:00 PDT 2015

Recent Developments in the Greek Debt Saga

The situation in Greece remains very fluid. Unwilling to implement certain proposed austerity measures, the Greek government has rejected the proposal for an extension of the financial bailout package by its official creditors. That said, it is not a foregone conclusion that this will lead to a significant debt default or Greece’s exit from the eurozone.

Nevertheless, the possibility of both events has increased, leading to greater caution among investors and a flight to safer, more liquid financial assets. The next week is an important one and we will continue to monitor events closely. According to media reports, a last-ditch effort to broker a deal between the Greek government and its creditors may be underway.

Continue reading...

MARKET COMMENTARY  |  May 2015

World Markets Review for April 2015

Global stocks rose modestly amid a strong rally in the energy sector. Rising oil prices, surging M&A activity and central bank stimulus measures helped to support world stock prices despite a slowdown in U.S. economic growth during the first quarter. Emerging markets rallied as market observers pushed back the timing of an increase in interest rates by the Federal Reserve to later in the year. Bond markets declined and the dollar lost ground against the euro, the pound and most other currencies.

Continue reading...

INVESTMENT INSIGHTS  |  April 2015  |  FEATURING Robert W. Lovelace

Dollar Strength and the Case for Selective Hedging

Many Currencies Face Dollar Strength and Higher Volatility

Dollar index of major currencies, calculated by the Fed using daily data (not seasonally adjusted) indexed to 100 as of March 1973. Volatility is three-month option-implied at-the-money volatility, calculated by Citi using a simple weighted average of major currency pairs (57.6% euro-USD; 11.9% sterling-USD; 3.6% Swiss franc-USD; 13.6% yen-USD; 4.2% Swedish krona- USD; 9.1% Canadian dollar-USD); a lower number signifies lower volatility. Investors cannot invest directly in indexes.

Sources: Capital Group, Citi Research, Federal Reserve Board, MSCI.

Summary

  • A strong U.S. dollar and greater currency volatility are having a significant impact on near-term market returns.
  • The euro has already depreciated substantially against the dollar in recent months, and further declines may be limited.
  • Some investors have responded by turning to currency-hedged exchange-traded funds (ETFs), but that approach has its own problems. 

Continue reading...


Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.

Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and summary prospectuses, which can be obtained from a financial professional and should be read carefully before investing. 

The Capital Group companies manage equity assets through three investment groups. These groups make investment and proxy voting decisions independently. Fixed income investment professionals provide fixed income research and investment management across the Capital organization; however, for securities with equity characteristics, they act solely on behalf of one of the three equity investment groups.

Statements attributed to an individual represent the opinions of that individual as of the date published and do not necessarily reflect the opinions of Capital Group or its affiliates. This information is intended to highlight issues and not to be comprehensive or to provide advice.