1) MARKET BAROMETER
We reached the mid point of 2025. How was the ride so far?
June was another strong month for global markets. U.S. stocks continued to rise, helped by lower inflation and hints that the Federal Reserve might cut
interest rates later this year. European markets also performed well, as the economy showed signs of steady recovery.
S&P 500 index closed at 6,204.95 points on Monday, June 30, 2025. The S&P 500 gained +4.96% in June, following a +6.15% surge in May. ear‑to‑date, the index was up +5.5% as of June 30. This landscape suggests a bullish market
backdrop.
But there’s something important that investors should not miss: the U.S. dollar has been getting weaker for several months now—and that can change how your investments really perform, especially if you invest in euros. By the way, this was one of Donald Trump's MAGA goal to boost US export.
The Dollar is Losing Ground
At the start of 2025, 1 euro was worth about $1.10. By the end of June, that same euro was worth about $1.15.That means the dollar lost more than 5% of its value compared to the euro in just six months.
If you own investments in U.S. dollars (like U.S. ETFs or tech stocks) but the U.S. dollar
is not your main currency, this matters a lot. Even if those investments go up, you might not actually gain much—or you could even lose—when you convert back to your own currency (in my case, the EURO).
Let’s say I invested $10,000 in a U.S. stock fund in January, and by June it grew to $10,500—a +5% gain.
But because the
dollar got weaker:
- In January, my $10,000 was worth about €9,130
- In June, my $10,500 was worth only about €9,115
Result: I earned +5% in dollars, but actually "lost" money in euros. This is called FX drag—foreign exchange drag. It happens when currency movements reduce your real investment returns. Guess what? I have strongly noticed it in my own portfolio:
great growth in USD, actual loss in EUR.
The dollar has been falling for months, and that can eat into your real returns, if the dollar is not our day-to-day currency. It’s not enough to look at growth in dollars—we need to know what that means in our currency. We can use this knowledge when deciding to buy, sell, or rebalance our portfolio.
