09 Jul The New Global (Dis)Order and Investment Strategy in the Face of a Weaker Dollar

Although the dollar remains the primary reserve currency and unit of account globally, multiple structural and cyclical forces now predict a progressive loss of its relative strength. This phenomenon is occurring in a context of growing geopolitical and economic uncertainty: the return of Donald Trump to the presidency of the United States, the implementation of protectionist policies such as reciprocal tariffs, trade tensions with China, persistent conflicts in Europe and the Middle East, as well as the deep fiscal imbalances in the United States, paint a complex and volatile picture for international markets. Criteria’s recent Global Investment Committee—a quarterly meeting to define international strategies—analyzed this new scenario, concluding that we are facing a change in the rules of the game that requires a review of the weight of the dollar in portfolios.

In the short term, tightening immigration policies, declining business confidence, and high production costs stemming from new tariffs limit US growth, pressure inflation, and could accelerate a recession. In the long term, the so-called “Mar-a-Lago Agreement” promotes a deliberate strategy of weakening the dollar to regain manufacturing competitiveness and reduce the twin deficits—trade and fiscal—a vision that reshapes the global monetary system. History offers a clear warning: similar measures in the 1920s and 1930s worsened the Great Depression, underscoring the importance of strategic action.

In this new global (dis)order, portfolio management must prioritize diversification away from the dollar, maintaining its role as a unit of account but seeking higher returns in other currencies. A striking example is what happened between 2001 and 2008, when the dollar lost more than 40% of its value and emerging currencies appreciated more than 90%, driving local debt yields to levels above 15% annually. 

This same environment favored commodities, with a rise of more than 100%, and gold as a reserve of value, with an average annual return of 19%. Regarding equities, global markets outperformed the US market: while the S&P 500 returned 4.2% annually, the MSCI ACWI index—which includes 47 countries—reached 8.9%. 

Therefore, Criteria proposes a progressive strategy that combines greater exposure to emerging debt in local currencies, diversification in equities through the MSCI ACWI index, and tactical participation in the US Large Cap Growth segment, especially in companies with solid balance sheets and high growth potential thanks to the advancement of artificial intelligence.

In short, the redefinition of the global monetary order represents both a challenge and an opportunity: anticipating these structural changes will allow us to build more resilient portfolios, adapted to a multipolar world, and better positioned to capture the value that will emerge outside the traditional dollar axis.

The new global (dis)order commands the strategy

El Economista. Published on May 20, 2025.

Available at: https://eleconomista.com.ar/finanzas/el-nuevo-desorden-mundial-comanda-estrategia-n84913