Stats › Global markets and exchanges › The dollar
The dollar and equity returns
If you're a dollar investor holding shares in Tokyo or Frankfurt, you own two things at once. You own the businesses, and you own the currency they're priced in. When the dollar falls, those foreign returns convert into more dollars and the holding looks better without a single thing changing at the companies themselves. That's the idea this page is built around.
What's on it is the Federal Reserve's broad dollar index, where it actually peaked, and a table of US against international developed market returns for the last few calendar years so you can look at the pattern rather than take my word for its shape. There's a fair amount of correcting too. The dollar's high was January 2025, not October 2022, which is the version you'll usually hear. The famous 1985 and 2002 peaks sit on a completely different index with a different basket and a different base date. And the statistic about 40% or so of S&P 500 revenue coming from abroad is older than most of the people quoting it realise.
One thing I want to be upfront about. The 2025 pattern is striking, and I could not find a primary source that measures the relationship it suggests. So it's reported here as a pattern with the dates attached, not as a coefficient. Where a figure is my own arithmetic on two published index values rather than a published statistic, it's labelled that way. Links are at the bottom, and I'd much rather you pulled the numbers than trusted my summary of them.
The Federal Reserve's broad dollar index peaked at 128.84 in January 2025, not in 2022 as is usually assumed, and stood at 120.08 in June 2026, down 6.8% from that high. Calendar 2025 lines up almost mechanically: the dollar fell 5.8% and MSCI EAFE returned 31.22% in dollars against the S&P 500's 17.88%, a gap of 13.3 percentage points. In the first half of 2026 the dollar was flat and the gap closed to nothing. What does not exist is a primary source quantifying that relationship: the rigorous causal work on dollar cycles is about emerging market economies, not about the S&P 500 against EAFE.
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